When a stock index rises, it means that:
A) all stocks on the index have risen in value.
B) the weighted average of all stock prices in the index has risen.
C) all stocks on that index are equally weighted.
D) All of the answers are correct.

Question

Quizplus · Accepted Answer

A stock index reflects the overall performance of a group of stocks, and when it rises, it means that the weighted average of all stock prices in the index has risen. It does not necessarily mean that all stocks on the index have risen in value, nor does it mean that all stocks on that index are equally weighted. Therefore, option B is the most accurate choice.

When a Stock Index Rises, It Means That