In addition to the number of stocks represented,a difference between the S&P 500 and the Dow is that the S&P 500:
A) dates back to the nineteenth century while the Dow is a recent innovation.
B) is value-weighted while the Dow is an equally-weighted index.
C) includes foreign stocks while the Dow is domestic.
D) index includes dividends in its return while the Dow does not.

Question

Quizplus · Accepted Answer

The S&P 500 is calculated based on the market value of the stocks, making it a value-weighted index. On the other hand, the Dow is calculated on the basis of the sum of the prices of the stocks, giving an equal weight to each stock in the index.

In Addition to the Number of Stocks Represented,a Difference Between