As per the NISM Series X-B workbook's comparison of Exchange Traded Funds (ETFs) and Index Funds, what is a key difference between the two in terms of pricing?

[ A ]An ETF's price is available on a minute-to-minute basis since it trades on the exchange like any other security, whereas an Index Fund's price is the NAV available only on an end-of-day basis[ CORRECT ]

[ B ]Index Funds are priced minute-to-minute on the exchange, while ETFs are priced only once at the end of the day

[ C ]Both ETFs and Index Funds are priced only once a week by the Asset Management Company

[ D ]Both ETFs and Index Funds are priced only by the AMC at the end of the day, with no intraday trading

Takeaway

Option A is correct: the workbook states an ETF's price is available minute-to-minute on the exchange, while an Index Fund's price is the NAV available only at the end of the day from the AMC.

Derivation

The workbook's ETF versus Index Fund comparison covers nature, price, costs and liquidity. On price specifically, ETFs trade like any listed security with continuously updated intraday prices, while Index Funds are bought/sold from the AMC at a single NAV struck at the end of each trading day. The workbook also notes ETF costs are comparatively lower but can involve brokerage and bid-ask spreads, while Index Funds may have marginally higher management costs but no such trading-related costs. A common error is assuming both are priced identically since both passively track an index.

Why the others fail

B — Index Funds are priced minute-to-minute on the exchange, while ETFs are priced only once at the end of the day

This reverses the workbook's comparison; it is the ETF that trades minute-to-minute on the exchange, not the Index Fund.

C — Both ETFs and Index Funds are priced only once a week by the Asset Management Company

The workbook states ETF pricing is continuous intraday, and Index Fund pricing is NAV-based at the end of each day, not weekly for either.

D — Both ETFs and Index Funds are priced only by the AMC at the end of the day, with no intraday trading

Unlike Index Funds, ETFs are specifically described as being traded on the exchange with intraday, minute-to-minute pricing, not priced solely by the AMC.