Question

Visit the Bloomberg Markets website at www.bloomberg .com/markets/stocks. Their interactive graph allows you to see cumulative returns for individual stocks as well as market indices. Over the last five years, which of the three indices appears the most volatile––the S&P 500 (SPX:IND), the Dow Jones Industrial Average (INDU:IND), or the NASDAQ Composite (CCMP:IND)? Which index would have been the best investment if compounded over the last five years?

Short answer

NASDAQ Composite has outperformed the other two indices during the last five years.

Step-by-step solution

Introduction

The stock market is a place where corporations are registered and offer long-term debt and securities to the general public.

It is a platform where securities dealers and clients may meet and trade securities.

Explanation

TheNASDAQCompositeindexisthemostvolatile,withreturnsfluctuatingmorethantheothertwo.

The compound NASDAQ Composite has the best returns over the last five years, since it has outperformed the other two indices.