In Practice Which Market Index Would Best Be Used as a Proxy

question 8

Multiple Choice

In practice which market index would best be used as a proxy for the market portfolio in the CAPM?

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

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Definitions:

Subscription Revenue

Income generated from customers paying recurrent fees for access to a product or service over a period of time.

Accounting Equation

Assets = Liabilities + Owner’s Equity.

Income Statement

A financial statement that shows a company's revenues and expenses over a specific period, usually a fiscal quarter or year, to calculate net income.

Adjusting Entry

A journal entry made in accounting records at the end of an accounting period to allocate income and expenditure to the correct period.