The Dow Jones Industrial Average Is

question 62

Multiple Choice

The Dow Jones Industrial Average is:

• A) the most representative of the stock market indexes.
• B) an index of 500 largest corporate stocks in America.
• C) an index of 30 major stocks.
• D) an equally weighted index of all stocks traded on the New York Stock Exchange.

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Definitions:

Earnings Reinvested

Profits that are not paid out as dividends but are instead reinvested in the business to fund growth or pay down debt.

Retention Rate

A metric indicating the percentage of earnings not paid out as dividends but retained by the company for reinvestment.

Plowback Ratio

The proportion of the firm’s earnings reinvested in the business (and therefore not paid out as dividends). The plowback ratio equals 1 minus the dividend payout ratio.

Expected Growth Rate

The anticipated rate at which an investment, economy, or other financial entity will grow over a certain period.