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1.
The divisor used to calculate the Dow Jones Industrial Average _______.
Has been shrinking steadily in recent years. The divisor used to calculate the Dow has been shrinking steadily in recent years to account for arbitrary events such as stock splits and changes in the composition of the roster.
2.
Hearing a negative event about a company that drives its stock price down but does not affect its fundamentals can be a welcome thing to many investors.
True. If the fundamentals are strong, then this could be a buying opportunity.
3.
What is an "earnings surprise"?
When a company's actual earnings results differ from what Wall Street's analysts expect. The actual earnings may be higher or lower. As a result, the company's stock price may rise or fall.
4.
Which one of the following three companies is a member of the SP 500?
Software giant Microsoft. Microsoft is the only company out of the three choices that is a member of the SP 500. Berkshire Hathaway is excluded because it primarily holds stock of other companies. Royal Dutch Petroleum is not a member of the SP 500 because it is not a U.S. company.
5.
What response should a stock investor have regarding changes in regulation on a company?
An investor should pay attention to such changes. Sometimes, regulations greatly increase the costs of doing business or diminish a company's prospects.
