Which of the following indices is most appropriate as a benchmark portfolio for a large-cap mutual fund?
A)Wilshire 5000
B)S&P 500
C)Dow Jones Industrial Average
D)Russell 2000

Question

Quizplus · Accepted Answer

The S&P 500 is an index of 500 large companies listed on U.S. stock exchanges, and it is widely considered as a benchmark for the U.S. equity market. As a result, it is an appropriate benchmark for a large-cap mutual fund that invests in large-cap companies. The Wilshire 5000 and Russell 2000 are broader indices that include mid-cap and small-cap stocks, respectively. The Dow Jones Industrial Average, on the other hand, only tracks 30 blue-chip stocks and may not be diverse enough to serve as a benchmark for a large-cap mutual fund.

Which of the Following Indices Is Most Appropriate as a Benchmark