Question

tock market indexes: Multiple Choice all cover the same market sectors. vary in the type of stocks included. are all price-weighted. all react the same to a change in the price of a particular stock. are all computed using the same methodology.

Answer 1

The correct answer is letter "B": vary in the type of stocks included.

Step-by-step explanation:

A stock index is a statistical tool for measuring an economy or market transition. The Index is usually a representative weighted average sample of the industry. One of the most popular indices is the Standard & Poor's 500 (S&P 500) that is mostly used as a benchmark for U.S. stock markets. Certain indices, for example, the S&P 100, measure a global stock basket.

The difference between one index and another relies on what stocks they consider to weight and what factors of the stocks (price for instance) are weighted.