The Standard & Poor's 500 Index Includes

question 68

Multiple Choice

The Standard & Poor's 500 Index includes

• A) all of the stock listed on the New York Stock Exchange.
• B) 30 of the largest (market capitalization) and most active companies in the U.S. economy.
• C) 500 firms that are the largest in their respective economic sectors.
• D) 500 firms that are the largest as ranked by Fortune Magazine.

---

Definitions:

Term Structure

The relationship between interest rates (or yields) and different terms (or maturities) for debt securities.

Liquidity Premium

The additional return that investors require for holding securities with low liquidity, compensating them for the higher risk associated with difficulty in selling the asset quickly at its fair market value.

Term Structure

The relationship between interest rates or yields of different debt instruments, usually depicted by a yield curve showing various maturities.

Real Rate of Interest

The yield a investor foresees receiving, once inflation adjustments are made.