Canadian Securities Course (CSC) Level 2 Practice Exam

What is the key element of risks related to the composition of ETFs concerning their underlying assets?

1. Net income

2. Gross profit

3. Top line

4. Bottom line

The correct answer is: Bottom line

The key element of risks related to the composition of ETFs concerning their underlying assets is the "Bottom line." The bottom line refers to the net income of the ETF, which reflects its profitability after all expenses have been deducted from its revenues. It is crucial to consider the bottom line when analyzing ETFs as it gives a clear picture of the financial health and performance of the fund. In contrast, options A, B, and C (Net income, Gross profit, and Top line) are not directly related to evaluating the risks associated with the underlying assets of ETFs.