Question

Which of the following is commonly used in the real world to proxy for the market...

Which of the following is commonly used in the real world to proxy for the market portfolio? (choose only one best option):

Group of answer choices

S&P 500 Index

Treasury Bill

Apple Inc.

Treasury Bond

Verizon Communications Inc.

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Homework Answers

Answer #1

Market potfolio is that portfolio which consists of as many stocks or several stocks as that can have.

Treasury bill, treasury bond is government issued security, it is not proxy for the market portfolio.

Apple Inc., Verizon Communications Inc. are separate companies that can be proxy for their own firm, not for market potfolio.

S&P 500 index consists of 500 securities that are traded on that platform. These securities in one index S&P 500 represents a market portfolio. Therefore, In real word, S&P 500 is used to proxy for the market portfolio.

So answer is

S&P 500 Index

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