Which of the Following Statements Regarding the Dow Jones Industrial

question 83

Multiple Choice

Which of the following statements regarding the Dow Jones Industrial Average (DJIA) is false?

• A) The DJIA is not very representative of the market as a whole.
• B) The DJIA consists of 30 blue chip stocks.
• C) The DJIA is affected equally by changes in low- and high-priced stocks.
• D) The DJIA divisor needs to be adjusted for stock splits.
• E) The value of the DJIA is much higher than individual stock prices.

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Definitions:

Taxable Income

The portion of an individual's or company's income that is subject to taxes according to government regulations.

Income Measurement

The process of determining the monetary amount of the income earned by a business during a specific period.

Constructive Receipt

A tax principle stating that income is considered received by the taxpayer once it is credited to their account or made available without restriction.

Taxable Income

The portion of income used to calculate how much the entity owes in taxes to the government, after all deductions and exemptions are applied.