TABLE 3-10
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.

-Referring to Table 3-10, 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

TABLE 3-10
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.
 
-Referring to Table 3-10, 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

Looking at the table, we can see that the DJIA and S&P 500 have a strong positive correlation. When the DJIA is high, the S&P 500 tends to be high as well. Therefore, we can expect the S&P index in that week to be high.