CFA Practice Question

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CFA Practice Question

A(n) ______ index assumes that an investor purchases an equal number of shares for each stock in the index.

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.
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