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##### Chapter 02 Asset Classes and Financial Instruments

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**Question**

Question;19.;Which of the;following is true of the Dow Jones;Industrial Average?;A.;It is a;value-weighted average of 30 large industrial stocks.;B.;It is a;price-weighted average of 30 large industrial stocks.;C.;The divisor;must be adjusted for stock splits.;D.;It is a;value-weighted average of 30 large industrial stocks and the divisor must;be adjusted for stock splits.;E.;It is a;price-weighted average of 30 large industrial stocks and the divisor must;be adjusted for stock splits.;20.;Which of the;following indices is(are) market-value weighted?;I);The New York Stock Exchange Composite Index;II);The Standard and Poor's 500 Stock Index;III);The Dow Jones Industrial Average;A.;I only;B.;I and II only;C.;I and III;only;D.;I, II, and;III;E.;II and III;only;21.;The Dow Jones;Industrial Average (DJIA) is computed by;A.;adding the;prices of 30 large "blue-chip" stocks and dividing by 30.;B.;calculating;the total market value of the 30 firms in the index and dividing by 30.;C.;adding the;prices of the 30 stocks in the index and dividing by a divisor.;D.;adding the;prices of the 500 stocks in the index and dividing by a divisor.;E.;adding the;prices of the 30 stocks in the index and dividing by the value of these;stocks as of some base date period.;22.;Consider the;following three stocks;The;price-weighted index constructed with the three stocks is;A.;30.;B.;40.;C.;50.;D.;60.;E.;70.;23.;Consider the;following three stocks;The;value-weighted index constructed with the three stocks using a divisor of 100;is;A.;1.2.;B.;1200.;C.;490.;D.;4900.;E.;49.;24.;Consider the;following three stocks;Assume;at these prices that the value-weighted index constructed with the three;stocks is 490. What would the index be if stock B is split 2 for 1 and stock;C 4 for 1?;A.;265;B.;430;C.;355;D.;490;E.;1000

Paper#55073 | Written in 18-Jul-2015

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