Which of the Following Limits the Usefulness of the S&P

question 30

Multiple Choice

Which of the following limits the usefulness of the S&P 500 Index as a market benchmark?

• A) It is too heavily weighted with NYSE stocks to be representative.
• B) It is too difficult to calculate for the average investor.
• C) Its use of a base year in its calculations affects its performance.
• D) Its performance can be greatly affected by a small number of stocks.

---

Definitions:

Expanded Purchases Journal

A detailed record used in accounting to track all purchase transactions, including more comprehensive data than a standard journal.

Accounts Payable

A liability to a creditor, usually for purchases of goods and services.

Inventory

Materials and products a business holds for the purpose of sale or production.

General Journal

The primary bookkeeping ledger where all financial transactions of a business are initially recorded, prior to being posted to specific accounts.