Explanation:
Explanation:
Option A (Incorrect): Price-weighted indexes do not require rebalancing because the weight of each constituent security is determined solely by its price, which does not necessitate adjustments.
Option B (Correct): Equal-weighted indexes are regularly rebalanced because the weights of constituent securities change as their market prices fluctuate. This ensures that the weights remain equal over time.
Option C (Incorrect): Price-weighted indexes are not rebalanced, as their weights are price-determined, making this option incorrect.
Which of the following types of indexes are subject to periodic rebalancing by the index provider?
A
Price-weighted indexes exclusively
B
Equal-weighted indexes exclusively
C
Both price-weighted and equal-weighted indexes
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