LOS d, (Part 1): Distinguish among the predominant weighting schemes used in the construction of major equity share indices.
Q1. Which of the following statements regarding a free float-adjusted market capitalization index is least accurate?
A) The float adjusted index is considered the best index type by many investors, because it is representative and can be mimicked with minimal tracking risk.
B) A free float-adjusted market capitalization index assumes the investor has bought all the publicly available shares of each company in the index.
C) The major value-weighted indices in the world have not been adjusted for free float. |