Which of the following statements is not true?

Question

Quizplus · Accepted Answer

The statement "The S&P 500 is a price-weighted index" is not true. The S&P 500 is actually a value-weighted index, which means the weight of each stock in the index is based on its total market capitalization. A price-weighted index, on the other hand, is where stocks are weighted based solely on their stock price, without regard to their market capitalization. Therefore, choice D is the incorrect statement. Choice A is true because value-weighted indexes give more weight to larger companies, which are generally more representative of the overall health of the economy. Choice B is true because a price-weighted index gives equal weight to each stock, making it more representative of the average price of a single share of stock. Choice C is also true because the Dow Jones Industrial Average is a price-weighted index.

Which of the Following Statements Is Not True