In Practice Which Market Index Is Most Widely Used as a Proxy

question 69

Multiple Choice

In practice which market index is most widely used as a proxy for the market portfolio in the CAPM?

• A)Dow Jones Industrial Average
• B)Wilshire 5000
• C)S&P 500
• D)U.S.Treasury Bill

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Definitions:

Limited Partners

Investors in a partnership who are not involved in day-to-day operations and whose liability is limited to the amount of their investment.

Capital Budgeting

The method of analyzing and choosing long-term investment opportunities that align with the objective of maximizing shareholder wealth.

Investment Opportunities

Potential investments that a company or individual could make to earn a return.

Limited Partner

An investor in a partnership who is not involved in day-to-day management and whose liability is limited to the amount invested in the partnership.