In practice which market index is most widely used as a proxy for the market portfolio in the CAPM?
A)Dow Jones Industrial Average
B)Wilshire 5000
C)S&P 500
D)U.S.Treasury Bill

Question

Quizplus · Accepted Answer

Among the given options, the S&P 500 is the most widely used as a proxy for the market portfolio in the CAPM. The S&P 500 is a broad-based index that includes 500 large-cap U.S. stocks, covering various sectors and representing about 80% of the U.S. equity market. It is often used as a benchmark for the overall U.S. stock market performance and provides a good representation of the systematic risk that investors face.

In Practice Which Market Index Is Most Widely Used as a Proxy