Which of the following is a valid criticism of the method used to calculate the DJIA?

Question

Quizplus · Accepted Answer

A) It uses too few stocks to represent the entire market - The DJIA only tracks 30 large-cap stocks, which may not provide a complete picture of the overall market performance.

B) The divisor is not adjusted for small stock dividends - If a stock in the DJIA issues a small dividend, it can affect the calculation of the index in a disproportionate manner.

C) High-priced stocks carry more weight than low-priced stocks - The price-weighted calculation method used by the DJIA means that high-priced stocks have a greater impact on the index than low-priced ones, regardless of their market capitalization. This can distort the representation of the overall market.

Which of the Following Is a Valid Criticism of the Method