Chapter 9 Activity - Stock Indexese From the textbook 'Stock market indexes are designed to show the performance of the stock market. However, there are many stock indexes, and it is difficult to determine which index best reflects market actions. The three indexes below are used as a benchmark for comparing individual stocks with the overall market, for measuring the trend in stock prices over time, and for determining how various economic factors affect the market. ** Answer the questions about the three major stock indexes below by performing your own independent research, 11. While generally considered superior to price-weighted indexes, market capitalization indexes do not come without their own issues. What are some of the dangers/drawbacks to such indexes? tttt tttt 12. On June 16, 1995, the DJIA closed at $4,510.79. Assume the index lost 135 points on the next trading day. Compare that to a 500-point loss against the current level of the DJIA. Which occurrence would be more impactful? (find the percent change in the index on each day before answering) Letttt 13. What does your answer from #12 tell you about point movements on indexes compared to percent changes? Chapter 9 Activity - Stock Indexese From the textbook 'Stock market indexes are designed to show the performance of the stock market. However, there are many stock indexes, and it is difficult to determine which index best reflects market actions. The three indexes below are used as a benchmark for comparing individual stocks with the overall market, for measuring the trend in stock prices over time, and for determining how various economic factors affect the market. ** Answer the questions about the three major stock indexes below by performing your own independent research, 11. While generally considered superior to price-weighted indexes, market capitalization indexes do not come without their own issues. What are some of the dangers/drawbacks to such indexes? tttt tttt 12. On June 16, 1995, the DJIA closed at $4,510.79. Assume the index lost 135 points on the next trading day. Compare that to a 500-point loss against the current level of the DJIA. Which occurrence would be more impactful? (find the percent change in the index on each day before answering) Letttt 13. What does your answer from #12 tell you about point movements on indexes compared to percent changes
