How Do ETFs Work?
The index is the recipe, and the fund holds the ingredients.
Video coming soon. The lesson video will appear here once it is published on YouTube.
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1.What is an index, in the video's words?
The index is the recipe, and the fund holds the ingredients.
2.A 1,000,000 fund follows an index with weights of 40, 30, 20 and 10 percent. How much sits in the first company?
The weights must add up to 100 percent, so the amounts add up to the whole 1,000,000.
3.How is the net asset value of an ETF computed?
One million over a hundred thousand shares is 10.00.
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