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Basic Question 4 of 14
A price-weighted index gives the ______.
B. lowest-price stock more impact on the movement of the index
C. highest percentage change more impact on the movement of the index
A. highest-price stock more impact on the movement of the index
B. lowest-price stock more impact on the movement of the index
C. highest percentage change more impact on the movement of the index
User Contributed Comments 3
| User | Comment |
|---|---|
| kalps | DJIA is a price weighted index which looks negatively at stock splits |
| jasonkwk | what do u mean by looks negatively? |
| mcbreatz | A stock split will reduce the price of a stock by half so now that stock has less impact on the index. |
I am happy to say that I passed! Your study notes certainly helped prepare me for what was the most difficult exam I had ever taken.
Andrea Schildbach
Learning Outcome Statements
describe the choices and issues in index construction and management
compare the different weighting methods used in index construction
calculate and analyze the value and return of an index given its weighting method
describe rebalancing and reconstitution of an index
CFA® 2024 Level I Curriculum, Volume 3, Module 2.