CFA Practice Question

There are 275 practice questions for this study session.

CFA Practice Question

Which type of indices tend to have the contrarian effect?
A. Fundamentally weighted indices
B. Equally weighted indices
C. Market-capitalization-weighted indices
Explanation: Portfolio weights will shift away from securities that have increased in relative value and toward securities that have fallen in relative value whenever the portfolio is rebalanced.

User Contributed Comments 3

User Comment
gmanoj Contrarian style is an investment style that goes against prevailing market trends by buying assets that are performing poorly and then selling when they perform well.
farhan92 ^ the phrase "buy when there's blood in the streets" comes to mind.
markbucfa gmanoj: Attribute the definition you've provided to Investopedia. You will be cited for plagiarism if you don't do.
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