SIE Understanding Products and Their Risks Question 98: Answer and Explanation

Question: 98

Which of the following market indexes is a component of the Composite Index of Leading Indicators, also known as the Leading Economic Index (LEI)?

• A. Dow Jones Industrial Average (DJIA)
• B. S&P 500
• C. Russell 3000
• D. NASDAQ 100

Correct Answer: B

Explanation:

B: Choice C is correct because it is broadly considered an accurate reflection of the broad market, which is seen as a significant leading economic indicator for the economy as a whole. Choices A, C, and D are also considered important reflections of the broad market but are not used in the development of the monthly LEI report.