12.2

Because the Dow Jones Index Average is based on the movement of only ________ large, well-established stocks, many investors believe it reflects price movements for large firms rather than for the general market. A) 30 B) 50 C) 100 D) 500

A) 30

Jessica wanted to gauge stock performance in general. She found a useful tool that measured the stock prices of 30 large industrial firms, called the A) Dow Jones Industrial Average. B) Standard & Poorʹs Index. C) Value Line Survey. D) Moodyʹs Index. E) none of the above.

A) Dow Jones Industrial Average.

A stock market characterized by increasing prices is termed a(n) ________ market. A) bull C) animal B) bear D) none of the above

A) bull

A stock market characterized by ________ prices is termed a bear market. A) falling C) steady B) rising D) none of the above

A) falling

A ________ is a measure of the performance of a group of stocks that represent the market or a sector of the market. A) stock market index B) stock grouping C) market composite D) portfolio return E) none of the above

A) stock market index

The letters or characters that represent a stock is known as the stockʹs A) ticker. B) code. C) acronym D) share.

A) ticker.

The Dow Jones Industrial Average has been an index since what year? A) 1796 B) 1896 C) 1996 D) 2006

B) 1896

If you are very optimistic about the ability of firms to earn profits today and in the immediate future, what type of investor philosophy do you exhibit? A) Animalistic B) Bullish C) Bearish D) Psychic

B) Bullish

Because the DJIA weights stocks based on their relative prices, when a high priced stock moves a small amount on the DJIA, it has a(n) ________ impact on the index A) limited C) insignificant B) inordinately large D) minute

B) inordinately large

You are looking at the stock quotes in your newspaper and you see that your stock closed up 5% yesterday. Where would you look to see how it has been doing over the last year? A) Prior dayʹs close C) 52-week high and low B) P/E ratio D) Market cap

C) 52-week high and low

The ________ is a common stock indicator, consisting of 30 large industrial firms, and is used to indicate how well stocks have done. A) DAIA B) CMIA C) DJIA D) SPFA

C) DJIA

All of the following are stock market indexes except A) the Dow Jones Industrial Average. C) the Russell 100 B) the Standard & Poorʹs 500. D) the Wilshire 5000.

C) the Russell 100

The S&P 500 A) is the oldest and most widely quoted of the stock indexes. B) is a narrower index than the DOW. C) includes some stocks from the OTC market. D) all of the above

C) includes some stocks from the OTC market.

he DJIA weights stocks based on A) the size of the company. C) their relative prices B) their place alphabetically. D) none of the above.

C) their relative prices

When you got home after work, you saw on the news that the S&P was down by 20 points. Which of the following is true? A) All of your stocksʹ market prices must have declined by 20 points. B) Some of your stocksʹ market prices may have increased. C) Some of your stocksʹ market prices may have decreased. D) Both B and C are correct.

D) Both B and C are correct.

If you wanted information about how the entire stock market is performing, which index would provide you with information on virtually all types and sizes of companies? A) Dow Jones Industrials C) NASDAQ 100 B) S&P 500 D) Wilshire 5000

D) Wilshire 5000