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1 or two sentences please.

2007-04-06 10:42:10 · 2 answers · asked by Anonymous in Education & Reference Homework Help

2 answers

The Standard and Poors 500 (S&P 500) is an index made up of five hundred different stocks. Each is selected for liquidity, size, and industry.

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The index is weighted for market capitalization. The S&P 500 is the benchmark of the overall market, and frequently used as the standard of comparison in terms of investment performance.

2007-04-06 10:48:31 · answer #1 · answered by Jerry 7 · 0 1

http://www.fool.com/school/indices/sp500.htm
...........What Is It?........................
The Standard & Poor's 500 Index is usually considered the benchmark for U.S. equity performance. It represents 70% of all U.S. publicly traded companies. Part of the index's popularity is due to its close association with the largest mutual fund in the world, the Vanguard 500 Index Fund, and Spiders (AMEX: SPY), the first exchange traded fund (ETF).

As the name suggests, the S&P 500 consists of 500 companies from a diverse range of industries. Contrary to a popular misconception, the S&P 500 is not a simple list of the largest 500 companies by market capitalization or by revenues. Rather, it is 500 of the most widely held U.S.-based common stocks, chosen by the S&P Index Committee for market size, liquidity, and sector representation.

.....................Fun Fact...............
The Vanguard 500 Index Fund was conceived of by Vanguard head John Bogle as a way to align the interest of mutual fund management companies with the best interest of their investors. (Radical idea!) Vanguard launched the 500 Index Fund in 1976, and today it has become the first (and sometimes last) investment vehicle of choice for many Fools.

2007-04-06 11:38:40 · answer #2 · answered by LucySD 7 · 0 1

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