With regard to the costs of ETF ownership, which of the following statements is correct?

• Statement 1: For active short-term ETF investors, management fees and tracking error are far more significant considerations than commission and spreads when entering and exiting ETF positions.

• Statement 2: An ETF's daily price is set to its NAV, which is based on closing prices for the fund's underlying securities.

• Statement 3: Both security lending and tracking error are implicit costs for ETF investors.