You Want to Purchase a Security That Tracks the S&P

question 81

Essay

You want to purchase a security that tracks the S&P 500.What types of securities can you purchase to accomplish this goal?
Which type of security would you purchase and why would you choose that security over your other options?

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Definitions:

Variation

The measure of the spread or distribution of a set of data points.

Standard Error Of Estimate

A measure that indicates the accuracy of predictions made in a regression analysis; it reflects the typical distance between observed and predicted values.

Coefficient Of Correlation

An analytical measure that identifies the strength and directionality of a linear relationship involving two factors.

Coefficient Of Determination

The coefficient of determination, often denoted as R^2, is a statistic used in the context of statistical models whose main purpose is to provide a measure of how well observed outcomes are replicated by the model, based on the proportion of total variation of outcomes explained by the model.