Which One of the Following Statements Related to Stock Indexes

question 79

Multiple Choice

Which one of the following statements related to stock indexes is correct?

• A)The index divisor increases in value whenever a stock in the index undergoes a stock split.
• B)A value-weighted index includes both dividends and capital gains.
• C)The S&P 500 index is value-weighted.
• D)The DJIA is value-weighted.
• E)Index staleness is more apt to be a problem for the DJIA than for the Wilshire 5000.

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Definitions:

Cost Accounting

A branch of accounting focused on capturing a company's total cost of production by assessing its variable and fixed costs.

Product Costs

Costs directly attributable to the creation of a product, including direct labor, materials, and manufacturing overhead.

Period Costs

Costs that are expensed in the period in which they are incurred, rather than being capitalized or included in the cost of goods sold.

Raw Materials Inventory

The goods and materials that a company holds that are intended for use in the production process.