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An un-weighted, or equally-weighted, price index would be best used as a benchmark index for which of the following portfolios?
Correct Answer: B
The equally-weighted index would be clearly inappropriate for the S&P 500 fund or the DJIA fund. Likewise, it would be inappropriate for the large stock/bond fund since it is a stock index only. Since the 30-40 stock portfolio is equally-weighted, it should be compared with an equally-weighted index.