The Standard and Poor's 500 Index Is

question 115

Multiple Choice

The Standard and Poor's 500 index is

• A) an index of a basket of consumer good purchased by the typical consumer.
• B) an index based on the stock prices of 30 actively traded large companies.
• C) an index based on the 500 largest firms traded in the three biggest stock markets.
• D) an index of 5,000 companies traded on the national association of securities dealers automatic quotation system.

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Definitions:

Ownership Share

The portion of a company or asset owned by an individual or entity, typically represented by stock in the company.

Corporation

A legal entity recognized by law, formed to conduct business and capable of suing or being sued.

Financial Intermediary

An entity that acts as a middleman between two parties in a financial transaction, such as banks, investment funds, and insurance companies.

Economies of Scale

Cost advantages reaped by companies when production becomes efficient, as the scale of operation and output increases.