If the Market Prices of Each of the 30 Stocks

question 9

Multiple Choice

If the market prices of each of the 30 stocks in the Dow Jones Industrial Average (DJIA) all change by the same percentage amount during a given day, which stock will have the greatest impact on the DJIA?

• A) The stock trading at the highest dollar price per share
• B) The stock having the greatest amount of debt in its capital structure
• C) The stock having the greatest amount of equity in its capital structure
• D) The stock having the lowest volatility

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Definitions:

Pure Monopolist

A market scenario where a single seller controls the entire supply of a product or service, with no close substitutes available to consumers.

Productively Efficient

This refers to a situation where a firm produces goods at the lowest possible cost.

Allocatively Inefficient

A situation where resources are not allocated to produce the mix of goods and services that most benefits society or meets consumer preferences.

Allocatively Efficient

An allocation status of resources where enhancing the welfare of one party means diminishing that of another.