The S&P Index

question 25

Multiple Choice

The S&P index:

• A) Is price-weighted, which means that weight is given only to the price of each stock
• B) Allows the highest price stocks with the largest number of shares outstanding to carry the greatest influence in the movement of the index
• C) Covers 86 industry groups, 400 industrial, 22 transport, and 40 financial companies
• D) A and B
• E) B and C

---

Definitions:

Coupon

The interest rate stated on a bond when issued, which is paid by the issuer to the bondholder at specified intervals.

Indenture

A formal legal agreement, contract, or document, especially one outlining the terms of a bond or trust.

Deferred Call

Call provision prohibiting the company from redeeming the bond before a certain date.

Coupon Rate

The interest rate on a bond, expressed as a percentage of the bond's face value, paid by the bond issuer to the bondholder at specified intervals.