1.Which of the following indexes is a price weighted index?

A)   The Standard and Poor's Index.

B)   The Tokyo Stock Exchange Index.

C)   The Nikkei Dow Index.

D)   The New York Stock Exchange Index.

2.Which of the following statements about bond and stock market indexes is FALSE?

A)   Bond market indexes have been in existence virtually as long as the major stock indexes such as the Dow Jones Industrial Average (DJIA).

B)   A small number of very large firms can dominate a value-weighted index.

C)   When a company splits its stock, it loses weight in a price-weighted index.

D)   An unweighted index assumes that investors make and maintain an equal dollar investment in each stock in the index.

3.With regard to stock market indexes, it is least likely that:

A)   the use of a geometric mean produces a downward bias on an equal-weighted index compared to the use of an arithmetic mean.

B)   the use of price weighting versus market value weighting produces a downward bias on the index.

C)   a value-weighted index must be adjusted for stock splits but not for dividends.

D)   buying 100 shares of each stock in a price-weighted index will result in a portfolio that tracks the index quite well.

4.What are the three basic categories of bond indexes?

A)   Corporate; government; municipal.

B)   Investment grade; high yield; global.

C)   Manufacturing; service; technological.

D)   Secured; unsecured; subordinated offerings.

5.Which of the following is NOT a reason bond market indexes are more difficult to create than stock market indexes?

A)   Bond deviations tend to be relatively constant.

B)   There is a lack of continuous trade data available for bonds.

C)   The universe of bonds is much broader than that of stocks.

D)   The universe of bonds is always changing due to new issues, retired bonds, sinking funds and calls.

6.Which of the following regarding bond market indexes is FALSE?

A)   There are more bond issues than stocks.

B)   The price volatility of bonds is constantly changing due to the influence of maturity and market yield on bond durations.

C)   The bond universe is more stable than the stock universe.

D)   Unlike stocks, bonds lack continuous price trading data.

7.Which of the following sets of indexes are price-weighted?

A)   Dow Jones World Stock Index and Russell Index.

B)   S& 500 Index and Dow Jones Industrial Average.

C)   Dow Jones Industrial Average and Nikkei Dow Jones Stock Market Average.

D)   Morgan Stanley Capital International Index and S& 500 Index.

答案和详解如下：

1.Which of the following indexes is a price weighted index?

A)   The Standard and Poor's Index.

B)   The Tokyo Stock Exchange Index.

C)   The Nikkei Dow Index.

D)   The New York Stock Exchange Index.

The correct answer was C)

The Nikkei Dow Index is a price-weighted index. The other three are market value-weighted indexes.

2.Which of the following statements about bond and stock market indexes is FALSE?

A)   Bond market indexes have been in existence virtually as long as the major stock indexes such as the Dow Jones Industrial Average (DJIA).

B)   A small number of very large firms can dominate a value-weighted index.

C)   When a company splits its stock, it loses weight in a price-weighted index.

D)   An unweighted index assumes that investors make and maintain an equal dollar investment in each stock in the index.

The correct answer was A)

Bond market indexes are relatively new.

3.With regard to stock market indexes, it is least likely that:

A)   the use of a geometric mean produces a downward bias on an equal-weighted index compared to the use of an arithmetic mean.

B)   the use of price weighting versus market value weighting produces a downward bias on the index.

C)   a value-weighted index must be adjusted for stock splits but not for dividends.

D)   buying 100 shares of each stock in a price-weighted index will result in a portfolio that tracks the index quite well.

The correct answer was C)

A price-weighted index needs to be adjusted for stock splits, but a value-weighted index does not. Neither type of index considers dividend income.

Using a geometric mean rather than an arithmetic mean will produce a lower value for an equal-weighted index. Price weighting produces a downward bias compared to market weighting because firms that split their stocks (which tend to be the more successful firms) decrease in weight within a price-weighted index. The returns on a price-weighted index can be matched by purchasing a portfolio with an equal number of shares of each stock in the index.

4.What are the three basic categories of bond indexes?

A)   Corporate; government; municipal.

B)   Investment grade; high yield; global.

C)   Manufacturing; service; technological.

D)   Secured; unsecured; subordinated offerings.

The correct answer was B)

The three categories include investment grade, high-yield (weaker than investment grade) and global.

5.Which of the following is NOT a reason bond market indexes are more difficult to create than stock market indexes?

A)   Bond deviations tend to be relatively constant.

B)   There is a lack of continuous trade data available for bonds.

C)   The universe of bonds is much broader than that of stocks.

D)   The universe of bonds is always changing due to new issues, retired bonds, sinking funds and calls.

The correct answer was A)

Bond prices are quite volatile as measured by the bond’s duration.

6.Which of the following regarding bond market indexes is FALSE?

A)   There are more bond issues than stocks.

B)   The price volatility of bonds is constantly changing due to the influence of maturity and market yield on bond durations.

C)   The bond universe is more stable than the stock universe.

D)   Unlike stocks, bonds lack continuous price trading data.

The correct answer was C)

One reason why the creation of a bond index is more difficult than a stock index is due to the fact that the universe of bonds is constantly changing because of numerous new issues, bond maturities, calls, and bond sinking funds.

7.Which of the following sets of indexes are price-weighted?

A)   Dow Jones World Stock Index and Russell Index.

B)   S& 500 Index and Dow Jones Industrial Average.

C)   Dow Jones Industrial Average and Nikkei Dow Jones Stock Market Average.

D)   Morgan Stanley Capital International Index and S& 500 Index.

The correct answer was C)

The Dow Jones World Stock Index, the Russell Index, the S& 500 Index, and Morgan Stanley Capital International Index are all market-value weighted. Only the Dow Jones Industrial Average and the Nikkei Dow Jones Stock Market Averages are price-weighted.