Why should I choose AnalystNotes?

AnalystNotes specializes in helping candidates pass. Period.

Basic Question 1 of 2

Security market indices are used ______

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
You need to log in first to add your comment.
I used your notes and passed ... highly recommended!
Lauren

Lauren

Learning Outcome Statements

describe uses of security market indexes

compare types of security market indexes

CFA® 2025 Level I Curriculum, Volume 3, Module 2.