The Dow Jones Industrial Average Is Calculated Using the _____

question 34

Multiple Choice

The Dow Jones Industrial Average is calculated using the _____.

• A) total market value of 30 stocks
• B) stock price of 30 large, well-established industrial corporations
• C) a weighted index of 30 stocks
• D) industrial, railroad, financial, and utility stocks

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Definitions:

Tax Shield

The reduction in income taxes that results from taking an allowable deduction from taxable income, such as mortgage interest, depreciation, or charitable donations.

All Equity

A financial structure where a company is financed entirely through equity without any debt financing.

Leverage

The use of various financial instruments or borrowed capital to increase the potential return of an investment.

Interest Rate

The percentage of a sum of money charged for its use, typically expressed annually, affecting loans, mortgages, and savings.