Which of the Following Demonstrates That Simple Price Indices Are

question 44

Multiple Choice

Which of the following demonstrates that simple price indices are limited because they do not fully reflect changes in shareholder wealth?

• A)They only trace changes in the aggregate market capitalisation of securities.
• B)They ignore dividends paid to shareholders.
• C)Not all companies are represented in the index.
• D)They are not updated often enough to be meaningful.

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Definitions:

Negotiable Instrument

A documented pledge to pay a specified amount of money, either upon request or at a scheduled time, with the name of the person making the payment included in the document.

Fair Dealing

The principle of acting honestly and maintaining integrity in transactions, often associated with laws aimed at preventing unfair business practices.

Check-Cashing Service

A financial service where checks are cashed for a fee, offering immediate access to the funds rather than waiting for bank clearance.

For Deposit

A notation indicating that funds are to be deposited into a bank account rather than cashed or used for another purpose.