The correct answer is      (E.) 14.6%

That's right, as of the end of March, the highest yield offered by an ETF was a whopping 14.6% -- seven times the average yield on the S&P 500. Even better, thanks to the diversification of ETFs, this yield is considerably more secure than those offered by individual stocks. With the combination of yields and safety, it's no wonder income investors can't get enough of exchange-traded funds.

But broad diversification isn't the only reason ETFs are considered safe -- their avoidance of leverage is also beneficial. Many other types of funds use leverage -- that is, they borrow money at short-term rates to invest. They may also use complex derivatives (futures, swaps, and options) to ratchet up their exposure to the market. Leverage can give these funds more bang for the buck, but it also adds risk. When markets sell off and credit is hard to get, leverage can intensify losses and lead to dividend cuts -- something most high-yield ETFs can avoid.

And don't think ETFs with eye-popping yields are just diamonds in the rough. Today, there are scores of safe ETFs for the yield-hungry investor to choose from. In a recent issue of her income-investing newsletter, High-Yield Investing, editor Carla Pasternak went on the hunt for high-yielding exchange-traded funds. Her results were phenomenal: a total of 16 ETFs with yields above 6% -- and each of these yields is safer than those offered by most individual securities.

To learn more about High-Yield Investing, including how to access the names of the high-yielding, high-safety ETFs that Carla highlighted in her recent issue (including the special ETF yielding 14.6%), please visit this link.