The Dow Jones Transportation Average (DJTA) is an average of the share prices of

Question

The Dow Jones Transportation Average (DJTA) is an average of the share prices of 20 transportation companies. According to the “Dow Theory,” demand for goods is reflected in the amount of cargo carried by transportation companies and delivered to consumers and businesses. A higher DJTA correlates to a greater need for cargo transportation, while a lower DJTA correlates to a lesser need for cargo transportation. Suppose that the U.S. economy is at Situation (1), and recently, the DJTA decreases by 20%. According to the Dow Theory, the recent decrease in the DJTA most likely means that _____.

Explanation / Answer

the memand for cargo is lesser in this situations. here the DJTA has decreased, in the same proportion the demand for cargo transportation will comes down.

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.