Question of the Week

The broadest measure of the activity and movement of the overall stock market can be measured by using which of the following indexes?

a) Lehman Aggregate Bond Index
b) Wilshire 5000
c) Dow Jones Industrial Average (DJIA)
d) S&P 500

Answer: The correct answer is b).

The Wilshire 5000 is a value weighted index that consists of more than 7,000 issues that trade on the NYSE, AMEX and in the OTC market. It is considered to be the broadest measure of the activity and movement of the overall stock market. The DJIA consists of 30 industrial stocks and is the most widely used index, but it is the narrowest measure of the market. The S&P 500 measures the largest issues that trade on the NYSE. The Lehman Aggregate Bond Index tracks the performance of more than 5,000 different types of bonds.