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

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Definitions:

Direct Materials

Raw materials that can be directly attributed to the production of goods.

Direct Labor

The wages and related expenses for employees who are directly involved in the production of goods or services.

Overhead Cost

Rephrased: Expenditures related to the business's general operations, not directly linked to any specific product or service.

Direct Materials

Raw materials that are directly used in the production of a product and can be easily attributed to that product.