Because the DJIA Weights Stocks Based on Their Relative Prices,when

question 119

Multiple Choice

Because the DJIA weights stocks based on their relative prices,when a high priced stock moves a small amount on the DJIA,it has a(n) ________ impact on the index.

• A)limited
• B)inordinately large
• C)insignificant
• D)minute

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Definitions:

Book Value

The net value of a company's assets minus its liabilities, often used to assess its equity value.

Intangible Asset

An asset that is not physical in nature, such as patents, copyrights, trademarks, and goodwill.

Depreciation Expense

An accounting method of allocating the cost of a tangible asset over its useful life to represent how much of the asset's value has been used.

Estimated Useful Life

The expected period over which an asset is anticipated to be used by a business.