Financial Industry Regulatory Authority (FINRA) Practice Exam 2025 - Free FINRA Practice Questions and Study Guide

An exchange-traded fund (ETF) is the most suitable investment fund for an active trader wanting to trade intraday. ETFs are designed to be traded on an exchange like stocks, allowing investors to buy and sell shares throughout the trading day at fluctuating prices. This intraday trading capability closely aligns with the needs of active traders who seek to capitalize on market movements within the same day.

In contrast, mutual funds are priced at the end of the trading day, meaning that any trades made during the day will be executed at that day's closing price, which is not ideal for an active trader looking to make quick trades. Similarly, closed-end funds trade on exchanges like ETFs, but they typically have less liquidity and can experience larger price discrepancies compared to their net asset value, which may not be favorable for rapid trading. Exchange-traded notes (ETNs), while also traded on an exchange, are debt instruments and may involve additional risks that do not align with the typical needs of intraday trading.

Therefore, the most suitable choice for an active trader is an ETF, as it offers the necessary flexibility and liquidity for intraday trades.