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,you will expect an increase in the DJIA to be associated with
A)an increase in the S&P 500 index
B)a decrease in the S&P 500 index
C)no predictable change in the DJIA
D)no predictable change in the S&P 500 index

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,you will expect an increase in the DJIA to be associated with
A)an increase in the S&P 500 index 
B)a decrease in the S&P 500 index 
C)no predictable change in the DJIA 
D)no predictable change in the S&P 500 index

Quizplus · Accepted Answer

The question is asking us about the association between the DJIA and the S&P 500 index. By looking at the data in the chart, we can see that when the DJIA increased (for example, between weeks 4-5 and 9-10), the S&P 500 index also increased. Therefore, we can expect an increase in the DJIA to be associated with an increase in the S&P 500 index.