Which of the Following Statements Is False

question 32

Multiple Choice

Which of the following statements is false?

• A) The S&P 500 and the Wilshire 5000 indexes are both well-diversified indexes that roughly correspond to the market of U.S. stocks.
• B) Practitioners commonly use the S&P 500 as the market portfolio in the CAPM with the belief that this index is the market portfolio.
• C) Standard & Poor's Depository Receipts (SPDR, nicknamed "spider") trade on the American Stock Exchange and represent ownership in the S&P 500.
• D) The S&P 500 was the first widely publicized value weighted index and it has become a benchmark for professional investors.

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Definitions:

Determinant Attributes

Key features or characteristics of a product or service that influence the buyer's decision to purchase.

Financial Risk

The possibility of losing money on investments or business activities, encompassing a wide range of risks including market, credit, operational, and liquidity risks.

Noncompensatory Decision Rule

At work when consumers choose a product or service on the basis of a subset of its characteristics, regardless of the values of its other attributes.

Compensatory Decision Rule

At work when the consumer is evaluating alternatives and trades off one characteristic against another, such that good characteristics compensate for bad ones.