The Stocks on the Dow Jones Industrial Average

question 2

Multiple Choice

The stocks on the Dow Jones Industrial Average

• A) have remained unchanged since the creation of the index.
• B) include most of the stocks traded on the NYSE.
• C) are changed occasionally as circumstances dictate.
• D) consist of stocks on which the investor cannot lose money.
• E) include most of the stocks traded on the NYSE and are changed occasionally as circumstances dictate. The stocks on the DJIA are only a small sample of the entire market and have been changed occasionally since the creation of the index; one can lose money on any stock.

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Definitions:

Return on Assets Ratio

The Return on Assets Ratio measures a company's ability to generate earnings from its assets, calculated by dividing net income by the average total assets.

Interest Expense

The cost incurred by an entity for borrowed funds, reflecting the interest payments due on any type of debt.

Return on Assets Ratio

A financial metric used to evaluate a company's profitability relative to its total assets.

Earnings Per Share

Earnings per share (EPS) is a financial ratio that indicates the portion of a company's profit allocated to each outstanding share of common stock.