Determine the authorized participant

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You are an authorized participant (AP) for an S&P500 index ETF trading on the TSX. The ETF is currently trading at a price of $15 per share while the NAV is $14 per share. As an AP, what actions would you take, if any?

Multiple Choice

-Buy the ETF on the TSX.

-Redeem the ETF with the fund sponsor to receive the creation basket (i.e., the stocks included in the S&P500).

-Sell the stocks from the creation on the appropriate exchange.

-Do nothing, there is no profit to be had.

-Buy the ETF from the exchange and hold it until NAV and market prices equalize.

-Buy the creation basket (stocks included in the S&P500) from the appropriate exchange.

-Provide the creation basket to the ETF sponsor and in return receive the ETF.

-Sell the ETF on the TSX.

Reference no: EM133120860

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