In: Finance
Stock market indexes are constructed by weighting the components by any one of the following:
Answer
Introduction of Stock market indexes
A market index is a hypothetical portfolio of investment holdings which represents a segment of the financial market. The calculation of the index value comes from the prices of the underlying holdings. Some indices have values based on market-cap weighting, revenue-weighting, float-weighting, and fundamental-weighting. Weighting is a method of adjusting the individual impact of items in an index.
Key Points
Conclusion
weighting by market capitalization of the stock's company; weighting by total sales of the company; weighting by the price of the stock are thr components of stock market Indexes.
Answer(C)