Question

Which of the following indexes are value-weighted?

1) Dow Jones Industrial Average
2) S&P 500
3) Nikkei 225
4) FTSE 100

Answer 1

The S&P 500 is a value-weighted index, whereas the Dow Jones Industrial Average is a price-weighted index, with no information provided on the Nikkei 225 or FTSE 100.

Step-by-step explanation:

Among the given options, the S&P 500 is a value-weighted index, which means it is the weighted average market capitalization of the firms selected to be in the index. The Dow Jones Industrial Average, on the other hand, is a price-weighted index, which is based on the price of the 30 industrial stocks tracked on the New York Stock Exchange. The question regarding Nikkei 225 and FTSE 100 was not answered in the given reference material, and therefore, we'll avoid speculating on their weighting methods.