Using the S&P 500 Portfolio as a Proxy of the Market

question 51

Multiple Choice

Using the S&P 500 portfolio as a proxy of the market portfolio

• A)is appropriate because U.S.securities represent more than 60% of world equities.
• B)is appropriate because most U.S.investors are primarily interested in U.S.securities.
• C)is appropriate because most U.S.and non-U.S.investors are primarily interested in U.S.securities.
• D)is inappropriate because U.S.securities make up less than 40% of world equities.
• E)is inappropriate because the average U.S.investor has less than 20% of her portfolio in non-U.S.equities.

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Definitions:

Constructed

Made, built, or put together using various parts or materials, often referring to buildings, roads, or other engineered structures.

Deposition

The geological process where sediments, soil, and rocks are added to a landform or landmass.

Low-gradient Stream

A stream that has a gentle slope, resulting in slower water movement and often a meandering course.

Point Bar

a depositional feature made of alluvium that accumulates on the inside bend of streams and rivers below the slip-off slope.