Which One of the Following Statements Is Incorrect Concerning Stock

question 67

Multiple Choice

Which one of the following statements is incorrect concerning stock indexes?

• A) Indexes have been developed for foreign stocks.
• B) Some indexes cover only a specific market sector.
• C) Most indexes include all of the publicly-traded common stocks.
• D) Some indexes are equally weighted.

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Definitions:

Earnings Per Share

A measure of a company's profitability calculated by dividing its net earnings by the number of outstanding shares.

Price-Earnings Ratio

A valuation ratio for a company calculated by dividing its current share price by its earnings per share, indicating the dollar amount an investor can expect to invest in a company in order to receive one dollar of that company's earnings.

Dividend Payout Ratio

A financial ratio that shows the proportion of earnings a company pays out to shareholders in the form of dividends.

Dividend Yield Ratio

The dividend yield ratio is a financial metric that measures the amount of dividends a company pays out to its shareholders relative to its share price.