Asked by fatima khreis on Jun 06, 2024
Verified
An index computed from a simple average of returns is a/an ________.
A) equal weighted index
B) value weighted index
C) price weighted index
D) share weighted index
Value Weighted Index
An index in which each constituent is weighted according to its market value, reflecting the performance of the market based on total capitalization.
Share Weighted Index
A stock market index in which each company is weighted according to the total value of its outstanding shares.
Price Weighted Index
A stock market index in which each company's stock influences the index in proportion to its price per share.
- Familiarize oneself with the assorted classifications of stock indices and the processes for calculating them.
Verified Answer
MA
Mohamed Ahmed khalifaJun 10, 2024
Final Answer :
A
Explanation :
An index computed from a simple average of returns is known as an equal weighted index. This type of index gives equal importance to each component of the index, regardless of its market capitalization or size.
Learning Objectives
- Familiarize oneself with the assorted classifications of stock indices and the processes for calculating them.