The Major U.S. Stock Indexes Are Highly Correlated

question 4

True/False

The major U.S. stock indexes are highly correlated.

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Definitions:

Diminishing Returns

A principle stating that if one input in the production of a commodity is increased while other inputs are held fixed, a point will eventually be reached at which additions of the input yield progressively smaller, or diminishing, increases in output.

Economies of Scale

The cost advantages that enterprises obtain due to their scale of operation, with cost per unit of output generally decreasing with increasing scale as fixed costs are spread out.

Average Variable Costs

represent the variable costs (costs that change with output level) per unit of output, calculated by dividing the total variable costs by the quantity of output produced.

Marginal Cost

The cost of producing one additional unit of a product, calculated by the change in total cost divided by the change in quantity.