Practicing Success

Target Exam

CUET

Subject

Business Studies

Chapter

Financial Markets

Question:

Match the following:

1. Dow Jones A. Market capitalization weightages of prices for stocks listed in the NASDAQ stock market
2. NASDAQ composite index B. Benchmark index of the European market
3. S and P 500 C. Treated as a proxy for the US stock market
4. FTSE 100 D. Oldest quoted stock market index in the United States
Options:

1-C, 2-A, 3-D, 4-B

1-A, 2-C, 3-B, 4-D

1-D, 2-A, 3-C, 4-B

1-A, 2-D, 3-C, 4-B

Correct Answer:

1-D, 2-A, 3-C, 4-B

Explanation:

The correct answer is option (3)- 1-D, 2-A, 3-C, 4-B.

  1. Dow Jones - Oldest quoted stock market index in the United States.
  2. NASDAQ Composite Index-  Market capitalization weightages of prices for stocks listed in the NASDAQ stock market.
  3. S and P 500- Treated as a proxy for the US stock market.
  4. The FTSE 100- Benchmark index of the European market.

A stock market index is a barometer of market behaviour. It measures overall market sentiment through a set of stocks that are representative of the market. It reflects market direction and indicates day-to-day fluctuations in stock prices. An ideal index must represent changes in the prices of securities and reflect price movements of typical shares for better market representation. In the Indian markets the BSE, SENSEX and NSE, NIFTY are important indices. Some important global stock market indices are:

* Dow Jones Industrial Average is among the oldest quoted stock market index in the US.

* NASDAQ Composite Index is the market capitalisation weightages of prices for stocks listed in the NASDAQ stock market.

* S and P 500 Index is made up of 500 biggest publicly traded companies in the US. The S and P 500 is often treated as a proxy for the US stock market.

* FTSE 100 consists of the largest 100 companies by full market value listed on the London Stock Exchange. The FTSE 100 is the benchmark index of the European market.