Question

The most broadly based index that uses a broad base of stocks in its portfolio and can give an investor a good indication of how the overall stock market has performed in a given day is called the:

		Dow Jones Industrial Average
		Standard & Poor's 500
		Russell 2000 Index
		Wilshire 5000

Use of the dividend discount model (DDM) and the discounted cash flow model (DCF) are examples of which type of stock valuation?

		relative
		absolute
		comparative analysis
		intrinsic value

Answer 1

The S& P 500 index provides aprroximately 80% of total value of the US stock market and in general could be used as a proxy for the broad market as a whole.

Answer is

Standard & Poor's 500

'

The value arrived at after using either the dividend discount model or the Discounted cash flow model is called the intrinsic value of stock valuation and this intrinsic value is compared with actual market price to gauge whether it is under or over valued.

Answer is Intrinsic value