Georgia Assessments for the Certification of Educators GACE Practice Test

A company that is included in the Dow Jones Industrial Average is most likely to be:

1. A foreign company

2. A small- to mid-sized technology company

3. A start-up that was recently listed on the stock exchange

4. A well-known corporation with a large market capitalization

The correct answer is: A foreign company

The correct choice is a well-known corporation with a large market capitalization. Companies included in the Dow Jones Industrial Average (DJIA) are typically those that are leaders in their respective industries and have a significant impact on the economy. This index is composed of 30 major publicly traded companies within the U.S. that are recognized globally and have a history of stable earnings and substantial market capitalization. These corporations are often household names, such as those in sectors like technology, finance, and consumer goods, reflecting their longstanding presence and reliability in the market. This inclusivity of prominent companies ensures that the DJIA serves as a barometer for the overall health of the stock market and the economy. In contrast, foreign companies, small-to mid-sized technology companies, and recently listed start-ups do not typically meet the criteria for inclusion in the DJIA, which emphasizes established, large-scale, well-regarded companies.