Which of the following indexes most accurately reflects changes in the value of the overall U.S....

Which of the following indexes most accurately reflects changes in the value of the overall U.S. equity market?

-Dow Jones Industrial Average

-S&P 500

-NASDAQ Composite Index

-NASDAQ Technology Index

Expert Solution

Let us first discuss these indexes one by one.

Dow Jones Industrial Average : Dow Jones Industrial Average (DJIA) is an index in US market which measures the performance of thrity large companies which are listed on stock exchange in United States.

S&P500 : S&P500 is also an index in US market that measures performance of 500 large companies which are listed on stock exchange in United States.

NASDAQ Composite Index: NASDAQ composite indes measures the performance of all companies which are listed on NASDAQ stock exchange. It is the second largest exchange in U.S.

NASDAQ technology index: NASDAQ technology index measures the performance of 100 top technology companies listed on NASDAQ in United Stock.

If we go by definition written above, Dow Jones covers only top 50 companies hence measuring overall equity market of U.S. considering top 50 companies is not logical and correct. Like, NASDAQ composite index covers almost all companies right from hight net worth (blue chip) to averagee perfoming companies. This calculation may dilute the prospective investor from guaranteed investment to risky investment. The average index in this category may not be the worth to consider as number of low performing companies may affect the index and the investor may be misguided. Likewise, the few top companies will affect the major part of the performance and the result may not be so reliable to take. NASDAQ technology is best for measuring technology companies like Apple, Microsoft, Intel etc and other part of the economy can not be measured.

Hence, the only best indicator of U.S. economy is the S&P500 which measure the perfomance of top 500 companies from all sectors and will reflects the most accurate changes in value of overall US equtiy market.

jeff jeffy answered 2 years ago

1. Which of the statements below accurately reflects the assumptions of the competitive exclusion principle? A.The...

1. Which of the statements below accurately reflects the assumptions of the competitive exclusion principle? A.The competitive exclusion principle assumes that the competitors have the exact same resource requirements and that environmental conditions may be variable. B. The competitive exclusion principle assumes that competitors have different resource requirements and that environmental conditions remain constant. C. The competitive exclusion principle assumes that the competitors have the exact same resource requirements and that environmental conditions remain constant. D. The competitive exclusion principle...

1) Which of the following accurately describes the role of the critical value? A) If the...

1) Which of the following accurately describes the role of the critical value? A) If the calculated value is greater than the critical value, we can conclude that there is a relationship between the two variables. B) The critical value for a particular hypothesis test depends on the number of degrees of freedom. C) If the calculated value is less than the critical value, we cannot reject the null hypothesis. D) All of the above. 2) Which of the following...

Which of bacterial antibiotic resistance mechanisms most accurately describes this following scenario?

Which of bacterial antibiotic resistance mechanisms most accurately describes this following scenario? Scenario: MRSA has attained a new penicilin binding protein which inhibits beta-lactams from binding. This was probably obtained through _______ and is an example of __________ mechanism of reisistance: 1) point mutation, target mimicracy 2) transformation, target modification 3) conjugation, target overproduction 4)) transduction, drug inactivation

1. Which of the following most accurately describes alternative stable states? a. With the same set...

1. Which of the following most accurately describes alternative stable states? a. With the same set of colonizing species and abiotic conditions, a community will always follow the same pattern of succession. b. When original conditions are restored following a disturbance, a community will not shift back to its original community type. c. Beginning with the same set of environmental conditions, or following a disturbance, a community may attain different compositions which will resist further disturbances. d. Early species modify...

Suppose the price indexes in Mexico and the U.S., which both began the year at 100,...

Suppose the price indexes in Mexico and the U.S., which both began the year at 100, are at 160 and 120, respectively, by the end of the year. If the exchange rate began the year at $0.25/M$ and ended the year at $0.20/M$, • What is the change in the real value of the U.S. dollar during the year? • What is the PPP rate at the end of the year as a direct quote in the U.S.? • What...

Which of the following statements accurately describes changes in the Qualifying Widow(er) (QW) tax filing status...

Which of the following statements accurately describes changes in the Qualifying Widow(er) (QW) tax filing status for Tax Year 2017? The taxpayer is entitled to file a joint return with their spouse for the year the spouse died. The taxpayer may file as a qualifying widow(er) in the year after the death of their spouse, even if they re-marry during the year following the year in which their first spouse died. The taxpayer no longer must have a qualifying child,...

answer the following a. Which of the following is the most likely strategy for a U.S....

answer the following a. Which of the following is the most likely strategy for a U.S. firm that will be receiving Swiss francs in the future and desires to avoid exchange rate risk (assume the firm has no offsetting position in francs)? A. purchase a call option on francs. B. sell a futures contract on francs. C. obtain a forward contract to purchase francs forward. D. all of the above are appropriate strategies for the scenario described. b. If you...

Which of the following are examples of market value indexes? I. S&P 500 stock index II....

Which of the following are examples of market value indexes? I. S&P 500 stock index II. Dow Jones Industrial Index III. NASDAQ index IV. Wilshire 5000 Index A. I B. II C. I and III D. I, III, and IV

The overall corporate objective of most firms is to maximize the value of the firm for...

The overall corporate objective of most firms is to maximize the value of the firm for the owners. Apparently in their bid to achieve the above objective, management of firms makes decisions as to choice of best alternatives available, use and/or allocate resources among available alternatives as well as engage in exchanges and/or operations and other activities. Required: a) Concisely outline the key decision areas of concern that financial managers of corporate organizations mostly focus on. b) How are the...

Which of the following most accurately describes the term cost/benefit analyses? a. considering whether employees should...

Which of the following most accurately describes the term cost/benefit analyses? a. considering whether employees should be entitled to certain fringe benefits b. calculating the cost of holding fundraising benefits for charity c. considering whether the cost of products exceeds the market selling price d. considering whether the cost of calculating certain types of information provides a commensurate economic benefit

Question