- CFA Exams
- CFA Level I Exam
- Topic 5. Equity Investments
- Learning Module 2. Security Market Indexes
- Subject 2. Index Construction and Management
CFA Practice Question
A(n) ______ index assumes that an investor purchases an equal number of shares for each stock in the index.
B. equally weighted
C. market-capitalization-weighted
A. price-weighted
B. equally weighted
C. market-capitalization-weighted
Correct Answer: A
User Contributed Comments 4
| User | Comment |
|---|---|
| johntan1979 | Equal dollar amount: Equally weighted Equal # shares: Price weighted |
| RicardoHM | Correct, that's a nice clean way to look at it. Thanks |
| khalifa92 | if equal amount of shares how do high price dominates the index? |
| mcbreatz | 1 share worth $15 will have more impact then 1 share worth $10. |