Stock a Has 10 Million Shares Issued and Stock B

question 71

Multiple Choice

Stock A has 10 million shares issued and stock B has 5 million shares issued.What is their relative weighting if both stocks are represented in the S&P 500?

• A) They have equal weighting, like all S&P 500 stocks.
• B) B has twice the weighting, to account for having fewer shares.
• C) A has twice the weighting, to account for having more shares.
• D) They are weighted according to their expected performance.

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Definitions:

Profit-Maximizing Firm's Output

The output level at which a firm achieves the maximum possible profit, typically where marginal cost equals marginal revenue.

Perfectly Competitive Firm

A theoretical concept where a company operates in a market where there are many buyers and sellers, all selling homogeneous products, with no barriers to entry or exit.

Monopolist's Product

A product that has no close substitutes, making the seller the sole provider and able to control market prices.

Price Taker

An entity (often a company or individual) that has no control to dictate prices for goods or services in the market and must accept the prevailing market price.