The Standard & Poor's 500 Index Differs from the Dow

question 36

Multiple Choice

The Standard & Poor's 500 Index differs from the Dow Jones Industrial Index because:

• A) it takes into account the stock prices of 500 of the largest firms, which is less than the DJIA.
• B) it is a price-weighted index, where the DJIA is a value-weighted index.
• C) larger firms are less important in the S&P 500 than in the DJIA.
• D) it takes into account the prices of more stocks and it uses a different weighting scheme.

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