ECONOMICS
FINANCIAL MARKETS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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They are securities exchanges.
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They calculate mathematical averages of stock prices.
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They provide indicators of overall market performance.
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They look at the average closing price of 500 active stocks.
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Detailed explanation-1: -The Dow Jones Industrial Average (The Dow or DJIA) and the S&P 500 are quintessential market benchmarks. Both underlie a number of investment products, are published by S&P Dow Jones Indices, and track the stocks of large U.S. companies.
Detailed explanation-2: -The Dow Jones Industrial Average (DJIA) and the Standard & Poor’s 500 Index (S&P 500) are both used to measure the performance of the stock market. The DJIA is based on the price of stocks for 30 large companies; the S&P 500 is based on the price of stocks for 500 companies.
Detailed explanation-3: -The Dow Jones Industrial Average (DJINDICES:^DJI) and the S&P 500 (SNPINDEX:^GSPC) are the two most touted market indices. They are indicators of the relative health of the market as a whole and are called upon to give us a quick summary of economic performance.
Detailed explanation-4: -The S&P 500 is considered a better reflection of the market’s performance across all sectors compared to the Nasdaq Composite and the Dow. The downside to having more sectors included in the index is that the S&P 500 tends to be more volatile than the Dow.