CFA Practice Question
In calculating the Standard & Poor's stock price indices, the adjustment for stock splits occurs ______
A. by adjusting the numerator.
B. automatically, due to the manner in which the index is calculated.
C. by adjusting the divisor.
Explanation: There is an automatic adjustment for stock splits because the decrease in the stock price is offset by an increase in the number of shares outstanding.
User Contributed Comments 3
| User | Comment |
|---|---|
| danlan | S&P is market value based |
| chuong | because S&P is value weighted index |
| jackwez | by market cap.... |