When a Stock Index Rises, It Means That

question 112

Multiple Choice

When a stock index rises, it means that:

• A) all stocks on the index have risen in value.
• B) the weighted average of all stock prices in the index has risen.
• C) all stocks on that index are equally weighted.
• D) All of the answers are correct.

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Definitions:

Corporate Distributions

Payments made by a corporation to its shareholders from its earnings.

Earnings and Profits

A term used in corporate taxation to refer to the after-tax profits of a corporation, often affecting dividend distributions.

Dividends

Payments made by a corporation to its shareholders, representing a portion of the company's earnings.

Net Capital Gain

The profit from the sale of an investment or property, calculated as the difference between the sale price and the original purchase price after adjusting for various factors such as brokerage fees, taxes, and improvements.