- CFA Exams
- CFA Level I Exam
- Topic 5. Equity Investments
- Learning Module 2. Security Market Indexes
- Subject 3. Uses of Market Indices
CFA Practice Question
Security market indices are used ______
II. to construct index funds.
III. as inputs for technical analysis.
IV. to determine systematic risk.
I. as benchmarks for portfolio performance.
II. to construct index funds.
III. as inputs for technical analysis.
IV. to determine systematic risk.
Correct Answer: I, II, III and IV
User Contributed Comments 2
| User | Comment |
|---|---|
| Shaan23 | In the text a question states. Uses of Market indices do NOT include serving as: Answer - measure of systematic risk. Tricky - So its not a measure of systematic risk but is used to determine systematic risk. Solution goes on as Security markets indices are used as a proxy for measuring systematic risk but is NOT a measure of systematic risk |
| birdperson | @shaan23 -- to get your beta you run a regression with an index and a security & beta is measure of systematic risk |