Which of the Following Statements About the Dow Jones Industrial

question 62

Multiple Choice

Which of the following statements about the Dow Jones Industrial Average are correct?
I. Higher-priced stocks tend to affect the average more than lower-priced stocks.
II. A one-point change in the DJIA correlates to a $1 change in average share value.
III. Changes in the DJIA are made to reflect company mergers and acquisitions.
IV. The DJIA divisor was determined when the average was created and remains constant.

• A) I and III only
• B) II and IV only
• C) I, III and IV only
• D) I, II, III and IV

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Definitions:

Economic Behavior

The study of the decision-making processes and actions of individuals and institutions regarding economic variables.

Microeconomics

The study of the economic behavior in particular markets, such as that for computers or unskilled labor.

Equilibrium Economics

A state in economic models where supply equals demand, leading to stable prices and quantities.

Microeconomics

The branch of economics that studies the behavior of individuals and firms in making decisions regarding the allocation of scarce resources and the interactions among these individuals and firms.