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.