- CFA Exams
- CFA Level I Exam
- Study Session 12. Equity Investments (1)
- Reading 37. Security Market Indices
- Subject 2. Index Construction and Management
CFA Practice Question
A value-weighted index in which a $50 stock increased by 15% and a $45 stock decreased by 17% would ______
A. increase by 1.8%.
B. decrease.
C. probably change, but that change is impossible to predict with the available information.
Explanation: A value-weighted index is derived from the market value of the constituent stocks. But it is impossible to derive the market value of the two stocks because the number of shares outstanding of either is not given.
User Contributed Comments 1
| User | Comment |
|---|---|
| achu | Value wtd means market value wtd; that info is not provided. |