#### Solution By Steps***Step 1: S&P 500 vs. DJIA*** The S&P 500 consists of 500 large-cap U.S. stocks, offering a broader representation of the market compared to the DJIA, which includes only 30 large-cap stocks.***Step 2: Diversification*** Due to its larger number of companies and broader industry coverage, the S&P 500 provides better diversification, reducing risk compared to the DJIA, which is more concentrated.***Step 3: Market Representation*** The S&P 500 is considered a more accurate gauge of the overall U.S. stock market performance due to its wider scope, encompassing various sectors, unlike the DJIA, which may not reflect the market as comprehensively.#### Final AnswerInvestors might prefer the S&P 500 over the DJIA as it offers better diversification, broader market representation, and a more comprehensive sample of the U.S. stock market.#### Key ConceptMarket Representation#### Key Concept ExplanationMarket representation refers to the extent to which an index accurately reflects the performance of the overall market by including a diverse range of companies across various sectors. A more comprehensive representation, like the S&P 500, provides investors with a better understanding of the market's performance and reduces risk through diversification.
