Suppose That Pfizer and Boeing Are Part of the Dow-Jones

question 18

Multiple Choice

Suppose that Pfizer and Boeing are part of the Dow-Jones Industrial Average. If on a given day Boeing closes at $320 and Pfizer at $40

• A) the difference in price will not affect the Average.
• B) the Average will include 8 shares of Pfizer for each share of Boeing.
• C) the effect of each stock on the Average cannot be determined without knowing the number of shares outstanding for each company.
• D) changes in the price of Boeing shares will have 8 times the effect on the Average as changes in the price of Pfizer.

Understand the outcomes of high versus low trust environments in organizational settings.

Differentiate between various third-party dispute resolution approaches and their application.

Understand the impact of fiscal policy and automatic stabilizers on the economy.

Distinguish between recessionary and inflationary gaps and their implications.

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Definitions:

Irrelevant

Pertains to information or factors that do not influence or impact a decision-making process.

Split-off Point

The stage in a production process where joint products are identifiable or separable into individual products.

Avoidable Cost

An expense that can be eliminated if a particular decision is made, not incurred if a specific activity is discontinued.

Fixed Production Cost

The portion of total production costs that does not change with the level of output, including costs such as rent, salaries, and insurance.