CFA Practice Question
Which index is more likely to behave like a moving average?
A. An appraisal-based index.
B. A repeat sales index.
C. A hedonic index.
Explanation: In a traditional appraisal-based index all of the properties in the index population are appraised regularly, and the index periodic returns are based on a simple aggregation of those appraised values each period. It tends to have characteristics of lagging and smoothing the real price changes.
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