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.

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Definitions:

Resistance

The opposition to the flow of electric current, measured in Ohms, which affects how much current flows through a circuit.

Voltage Drop

The reduction in electrical potential along the path of a current flowing through an electrical circuit, influenced by the circuit's resistance.

Circuit

A closed loop or pathway that allows the flow of electricity, comprising elements like conductors, resistors, and power sources.

Overheated Wiring

Electrical wiring that has become too hot due to excessive current flow, posing a risk of damage or fire.