Which of the Following Is a Disadvantage of the Dow

question 85

Multiple Choice

Which of the following is a disadvantage of the Dow Jones Industrial Average (the Dow) ?

• A) The Dow is not popular among the general public.
• B) The Dow does not provide good historical data.
• C) The Dow tracks only the price of the stock,not the overall value of a company.
• D) The Dow has not added any companies from its original list.
• E) The Dow resets to 10,000 at the beginning of each year.

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Definitions:

Par Value

The nominal or face value of a bond, share of stock, or another financial instrument, as stated by the issuing company.

Fair Value

The capital acquired from the sale of an asset or expended in the transfer of a liability in a smooth transaction among market intermediaries on the measurement date.

Acquisition

The process by which one company takes over the control of or purchases another company.

Appraised Value

An estimate of the fair value of an asset, determined by a professional appraiser based on inspection and analysis of the asset and market conditions.