In Practice Which Market Index Is Most Widely Used as a Proxy

question 49

Multiple Choice

In practice which market index is most widely used as a proxy for the market portfolio in the CAPM?

• A) Dow Jones Industrial Average
• B) Wilshire 5000
• C) S&P 500
• D) Canadian Treasury Bill

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Definitions:

Real Output

Measure of economic output adjusted for price changes; refers to the quantity of goods and services produced in an economy.

Stagflation

A situation in an economy where the inflation rate is high, economic growth rate slows, and unemployment remains steadily high.

Oil Prices

The cost per barrel of crude oil as determined by global supply and demand factors.

General Theory

A broad and fundamental principle or set of principles intended to explain a major phenomenon or field of study.