Which statement about credit risk for ETFs and ETNs is true?

The statement that a typical ETN carries credit risk whereas an ETF has almost none is correct because it accurately reflects the nature of these investment products.

Exchange-Traded Funds (ETFs) are designed to track a specific index or asset and typically own a portfolio of underlying assets. Because they are structured as funds that hold securities, their value is derived from the performance of those assets rather than the creditworthiness of an issuer. Thus, ETFs themselves do not carry credit risk related to the fund's structure, although the underlying assets could be subject to credit risk.

In contrast, Exchange-Traded Notes (ETNs) are unsecured debt securities issued by a financial institution. Their value is based on the performance of an underlying index; however, because they are essentially a promise to pay, ETNs carry credit risk associated with the issuer. If the issuer of the ETN encounters financial difficulties or defaults, investors may not receive their expected payments. Therefore, ETNs inherently have credit risk that is specific to the issuing bank or issuer's credit profile, which is not a factor for typical ETFs.