SCENARIO 3-11
Given below are the closing prices for the Dow Jones Industrial Average (DJIA)and the Standard & Poor's (S&P)500 Index over 10-weeks sometime in the past.

-Referring to Scenario 3-11,for the week when the DJIA is high,you will expect the S&P index in that week to
A)be about the same value as the DJIA
B)be low
C)be high
D)have no relationship with the DJIA value

Question

SCENARIO 3-11
Given below are the closing prices for the Dow Jones Industrial Average (DJIA)and the Standard & Poor's (S&P)500 Index over 10-weeks sometime in the past.
 
-Referring to Scenario 3-11,for the week when the DJIA is high,you will expect the S&P index in that week to
A)be about the same value as the DJIA 
B)be low 
C)be high 
D)have no relationship with the DJIA value

Quizplus · Accepted Answer

There is a positive correlation between the DJIA and the S&P 500, meaning that as one increases, the other is likely to increase as well. Therefore, if the DJIA is high, it is likely that the S&P 500 will also be high in that week.