Which of the following statements is most correct?
A) The Dow Jones Industrial Average is market-value weighted.
B) The Dow Jones Industrial Average is a good benchmark by which to measure the performance of investment managers.
C) The 500 stocks comprising the S&P 500 are the largest 500 firms.
D) Indexes exist for the bond market.

Question

Quizplus · Accepted Answer

The Dow Jones Industrial Average (DJIA) is actually price-weighted, not market-value weighted, making statement A incorrect. Statement B is debatable because the DJIA consists of only 30 stocks, which may not provide a comprehensive benchmark for all investment managers. Statement C is inaccurate because the S&P 500 includes 500 leading companies, but not strictly the largest by market capitalization. Statement D is correct because there are indeed indexes for the bond market, such as the Bloomberg Barclays US Aggregate Bond Index.

Which of the Following Statements Is Most Correct