Chartered Financial Analyst Level 1
Get started today
Ultimate access to all questions.
Comments
Loading comments...
Ultimate access to all questions.
An analyst gathers the following information about a market-capitalization-weighted index and one of its four constituent stocks:
If the stock price is $30 per share and the index value is 100, the stock's weight in the index is closest to:
A
25%. This is the stock's weight if calculated using an equal-weighted method.
B
30%. This is the stock's weight if calculated using a price-weighted method.
C
35%. This is the stock's weight calculated using the market-capitalization-weighted method.