There are several stock indexes that provide information about stock exchanges or stocks within an exchange....

There are several stock indexes that provide information about stock exchanges or stocks within an exchange. These indices (indexes) enable investors to compare the performance of individual stocks with general market indicators. Discuss the information contained in the Dow Jones Industrial Average and Standard & Poor’s 500.

Solutions

Expert Solution

Answer: Dow Jones Industrial Average- DJIA is an index that represents the overall stock market and it shows the value of 30 large publicly traded companies in USA. It was created in 1896 by Charles Dow. DJIA is a barometer of stock market that shows the direction and movement of market. If DJIA is in positive, stock market is considered positive and if it is in red then stock market is negative.

DJIA is a price weighted index which means, higher priced stocks have more influence rather than lower price stocks on index performance. Its market capitalization is $6.56 trillion.

Standard & Poor’s 500- It is also an index that is based on market capitalization of 500 large US publicly traded companies. It was founded in 19527. It is based on Free float market capitalization-weighted method that is adjusted by the number of shares available for public trading. Current market capitalization of S&P 500 is US$24 Trillion. This index shows the broader picture of overall market and economy. It is a widely quoted American index because it represents the largest companies in USA.

jeff jeffy answered 2 months ago

Next > < Previous

Related Solutions

Explore the functionality of the health information exchange (HIE). Both regional and local exchanges can provide...

Explore the functionality of the health information exchange (HIE). Both regional and local exchanges can provide benefits to both patients and healthcare providers. Evaluate the benefits and level of adoption of these information exchanges. Relate these benefits to population health management. Evaluate the value and usefulness of information exchanges. Analyze and suggest how patient continuity of care can be improved by access to an HIE.

The secondary market includes stock exchanges such as the New York Stock Exchange and NASDAQ. How do these stock exchanges facilitate the process of trading securities?

You are given the following information about the stocks in a two-stock portfolio:

You are given the following information about the stocks in a two-stock portfolio: Stock Return Portfolio Weight Standard Deviation The Blue Hotel, Inc. 22% 45% 9% Joys Food, Inc. 25% 55% 11% Correlation coefficient between the two stocks is 0.5. Using the information above, calculate the following: The expected return of the portfolio, The variance of the portfolio, The standard deviation of the portfolio. （All calculations must be shown for intermediate calculations）

The major stock market indexes had strong results in 2014. The mean one-year return for stocks...

The major stock market indexes had strong results in 2014. The mean one-year return for stocks in the S&P 500, a group of 500 very large companies was +11.4%. The mean one year return for the NASDAQ, a group of 3200 small and medium-sized companies was +13.4%. Historically, the one-year returns are approximately normal, the standard deviation in the S&P 500 is approximately 20% and the standard deviation in NASDAQ is approximately 30%. What is the probability that a stock...

How would the stock exchange co-operate with other associations/stockbrokers/ market makers and Stock Exchanges in other...

How would the stock exchange co-operate with other associations/stockbrokers/ market makers and Stock Exchanges in other countries, such that information is available to facilities for which it might likely be useful, to them or their clients How would the exchange serve as a barometer of economic activity?

You know the following information about the possible return offered by the two stocks, Stock X...

You know the following information about the possible return offered by the two stocks, Stock X and Stock Y next year . scenerio| Probability Return(x) Return Y recession| 40% -5% -6% normal | 60%. 10%. 14% a. Calculate the expected return and variances for stock X, Stock Y b from risk return point of view , which stock , X or Y is better investment , why? c what is the correlation coefficient between returns on stock X and stock...

You know the following information about the possible returns offered by the two stocks, Stock X...

You know the following information about the possible returns offered by the two stocks, Stock X and Stock Y next year. Scenario Probability Return from X Return from Y Recession 40% -5% -6% Normal 60% 10% 14% a. Calculate the expected returns and variances for Stock X, Stock Y. b. From risk-return point of view, which stock, X or Y is a better investment? Why? c. What is the correlation coefficient between returns on stock X and stock Y? d....

The selling prices of all stocks listed on the CDNX stock exchange are known to be...

The selling prices of all stocks listed on the CDNX stock exchange are known to be normally distributed with a mean of $20 and a standard deviation of $4. (a) What percentage of stocks have a selling price between $20 and $40? (b) If 167 of the stocks sell for $26 or higher, how many stocks sell on the CDNX exchange? (c) What is the minimum selling price of the most expensive 5% of stocks? (d) 2 out of every...

Consider the following information about two stocks and indicate which stock has the most systematic risk....

Consider the following information about two stocks and indicate which stock has the most systematic risk. State Probability Stock A Stock B Recession 0.20 0.11 (0.25) Norman 0.60 0.18 0.11 Boom 0.20 0.08 0.31 Market risk premium 6.50% Risk-free rate 5.00% ???

Required: 1. Provide a brief overview of the UAE Stock Exchanges. 2. Select one listed company...

Required: 1. Provide a brief overview of the UAE Stock Exchanges. 2. Select one listed company in the UAE and prepare a report that covers at least the followings: a) Nature of the industry in which the company is operating in, including the business model. b) Corporate governance mechanism practiced by the company. c) Regulatory and applicable financial reporting framework. d) Review of financial performance using financial ratios. 3. Attach the relevant pages of financial statements from the annual report...

Subjects