A Criticism of the S&P500 Used as a Market Index

question 12

Multiple Choice

A criticism of the S&P500 used as a market index would include which one of the following statements?

• A) The S&P500 is a value-weighted rather than a price-weighted index.
• B) It is nearly impossible for an investor to form a portfolio that replicates the S&P500 over time.
• C) Transaction costs may be effectively eliminated from the index.
• D) Stocks in the Index are not replaced often enough to cause problems.

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Definitions:

Soccer Game

A competitive team sport played between two teams with the objective of scoring goals by kicking a ball into the opponent's net.

Popular Players

Individuals or entities well-known within a specific industry or arena for their expertise, skill, or accomplishments.

Generic Social Experience

A common or universal social interaction that lacks specific branding or unique characteristics, making it universally relatable.

Competitive Spirit

The drive or motivation to outperform competitors and excel in activities, often seen as a positive trait in business and sports.