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Basic Question 1 of 2
Security market indices are used ______
II. to construct index funds.
III. as inputs for technical analysis.
IV. to determine systematic risk.
I. as benchmarks for portfolio performance.
II. to construct index funds.
III. as inputs for technical analysis.
IV. to determine systematic risk.
User Contributed Comments 2
| User | Comment |
|---|---|
| Shaan23 | In the text a question states. Uses of Market indices do NOT include serving as: Answer - measure of systematic risk. Tricky - So its not a measure of systematic risk but is used to determine systematic risk. Solution goes on as Security markets indices are used as a proxy for measuring systematic risk but is NOT a measure of systematic risk |
| birdperson | @shaan23 -- to get your beta you run a regression with an index and a security & beta is measure of systematic risk |
I am using your study notes and I know of at least 5 other friends of mine who used it and passed the exam last Dec. Keep up your great work!
Barnes
Learning Outcome Statements
describe uses of security market indexes
compare types of security market indexes
CFA® 2024 Level I Curriculum, Volume 3, Module 2.