The question mentions 3 reasons why ETFs are advantageous investment vehicles then it asks which one is least correct? Tax Efficiency Excellent Liquidity Redemption in cash at a known NAV I got this one right because the first two options are plainly obvious benefits of ETFs. I was reviewing the CFAI’s answers and their reasoning did not make much sense: “An ETF is based on the NAV computed one or a couple of days after the shareholder commits to redemption. So, the redemption value is unknown when the investor decides to redeem. For this reason, as well as an assessment of a large cash redemption charge, redemption by individual ETF holders is discouraged.” An ETF’s NAV is repriced nearly every second and adjusted by an exchange market marker in most cases. How would I not know, or barely be off, in my estimation of the NAV price that I sold at? It sounds like they’re describing an open-ended mutual fund that has end of day NAV repricing. Anyone else think that’s weird?
even so, redemption in cash alone is disadvantgeous to fund if the manager has to sell assets to cover the withdrawal