In practice which market index would best be used as a proxy for the market portfolio in theâ CAPM? A. Wilshire 5000 B. Dow Jones Industrial Average C. U.S. Treasury Bill D. S&a…

Question

In practice which market index would best be used as a proxy for the market portfolio in theâ CAPM?

A. Wilshire 5000
B. Dow Jones Industrial Average
C. U.S. Treasury Bill
D. S&P 500

Answer 1

D. S&P 500

Step-by-step explanation:

The market index that is used as a proxy for the portfolio of the market in the Capital Asset Pricing Model (CAPM) is S&P 500. This refers to a broad index of the market that involves the 500 stocks performance listed on the US stock exchange. Also it used for the calculation market weighted so that the value of the index could come

Hence, the correct option is d.