Question: The most well-known price-weighted series is the ________.
Select an Answer: Nikkei-Dow Jones Average Standard & Poor's Index Dow Jones Industrial Average New York Stock Exchange Index
Rationale:
A price-weighted scheme means that movements are influenced by the differential prices of the components. The Dow Jones Industrial Average is the most well-known price-weighted series. The Nikkei-Dow Jones Average is the best-known price-weighted series in Japan.
2025-06-19
Question: Given:
Price
Shares
COMPANY
A
B
C
A
B
C
Day 1
12
23
52
500
350
250
Day 2
10
22
65
500*
350
250
Day 3
8
26
51
1,000
350
250**
Day 4
9
25
19
1,000
350
750
*Split at close of day **Shares at close of Day 3
Calculate a Dow Jones Industrial Index for Day 1 assuming Day 1 is the first day of the computation of the DJIA.
Select an Answer: 13.000 29.000 19.000 87.000 17.000
Rationale:
Since no previous value of DJIA is available, the shares are given equal weight. Thus, the index is simply (12 + 23 + 52)/3 = 29.
2025-06-18
Question: Which of the following indexes are value weighted?
Select an Answer: All of these answers are correct. NYSE indexes NASDAQ series S&P indexes
Rationale:
Value-weighted indices mean market-value-weighted indices (e.g., NYSE, NASDAQ, and S&P series).
2025-06-17
Question: "Security prices reflect all publicly available information, including historical prices, trading volume, transactions characteristics, etc. in an unbiased fashion."
This statement is characteristic of which form of efficient markets hypothesis?
Select an Answer: strong form semi-strong form informational form weak form
Rationale:
According to the semi-strong form, everything that is in public domain, including but not restricted to security market information, is impounded in the current prices.
2025-06-16
Question: An example of a market-value-weighted stock market indicator series is the _______.
Select an Answer: American Stock Exchange Index none of these answers Nikkei Dow Jones Average Value Line Index
Rationale:
The Nikkei Dow Jones Average is a price-weighted index. The Value Line Indexes are geometric unweighted averages. The AMEX Index is a market-weighted index.
