The BSE Sensex, which is a benchmark stock market index of the Bombay Stock Exchange, is constructed using how many leading companies?

Introduction / Context:
This question checks basic financial literacy regarding India's equity markets. The BSE Sensex is one of the most widely followed stock market indices in the country and is often used as a barometer of the overall performance of large listed companies. Knowing the number of companies that constitute the index helps candidates understand how broad or narrow the index is.

Given Data / Assumptions:

• The index in question is the BSE Sensex, also called the Sensitive Index of the Bombay Stock Exchange.
• The query is about how many companies are included in the index.
• Options offer 30, 40, 50, 60, and 25 companies.
• We assume basic knowledge of capital markets and index structures.

Concept / Approach:
The Sensex is constructed from a group of large, well established, and actively traded companies across key sectors of the economy. Historically, and in current standard definitions, it is composed of 30 such companies. This is why it is often referred to as a basket of 30 blue chip stocks. The correct approach is to recall this fixed number and not confuse it with other indices such as the Nifty 50, which uses 50 stocks.

Step-by-Step Solution:
Step 1: Recall that Sensex is the main index of the Bombay Stock Exchange. Step 2: Remember that the Sensex is based on a specific number of large companies chosen to represent different sectors. Step 3: Recognise that the familiar phrase is Sensex of 30, meaning an index of 30 companies. Step 4: Compare this recollection with the options 30, 40, 50, 60, and 25 companies. Step 5: Select 30 companies as the correct answer.

Verification / Alternative check:
The official website of the Bombay Stock Exchange and standard finance textbooks describe the BSE Sensex as composed of 30 top traded companies. Exam guides for banking and financial awareness also mention this number and often contrast it with Nifty 50, which has 50 stocks. Since this information is stable over time and widely agreed, cross checking through multiple sources confirms that the correct figure is 30 companies.

Why Other Options Are Wrong:
40 companies: This number does not correspond to any mainstream Indian benchmark index associated with the Sensex name and is incorrect.
50 companies: This figure is linked with the Nifty 50 index of the National Stock Exchange, not with the BSE Sensex, so it is a trap option.
60 companies: This is simply a larger round number with no relation to the standard composition of the Sensex.
25 companies: This is lower than the actual number of Sensex constituents and is not supported by any official description.

Common Pitfalls:
One common mistake is confusing Sensex with Nifty. Candidates may remember that one major index has 50 stocks and then mark 50 for both indices. Another error is guessing based on a vague memory that the index includes a group of large companies, without recalling the specific number. To avoid such confusion, link the names as a mnemonic: Sensex 30 for Bombay Stock Exchange and Nifty 50 for National Stock Exchange.

Final Answer:
The BSE Sensex is constructed using 30 leading companies.