201k views
1 vote
Stock market indexes are commonly used to measure the

A) Performance of individual stocks
B) Overall market performance
C) Volatility of stock prices
D) Dividend yields of stocks

User MarkReedZ
by
7.8k points

1 Answer

7 votes

Final answer:

Stock market indexes like the Dow Jones Industrial Average and the Standard & Poor's 500 are used to measure the overall market performance by averaging the prices of stocks for a group of large companies. Therefore, the correct option is C.

Step-by-step explanation:

Stock market indexes are designed to measure the overall market performance by averaging the stock prices of a selected group of companies. The Dow Jones Industrial Average is one such index that looks at 30 large U.S. companies' stock prices to gauge market trends. Another significant measure is the Standard & Poor's 500, which includes the stock prices of 500 of the largest U.S. companies, while the Wilshire 5000 encompasses nearly all publicly traded U.S. companies. These indexes serve as indicators of how the stock market is moving as a whole, rather than the performance of individual stocks, volatility of prices, or dividend yields.

User Dreamweaver
by
7.4k points