Reading 56: Security Market Indices-LOS c 习题精选 2011, management, choosing, security, border

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Session 13: Market Organization, Market Indices, and Market Efficiency
Reading 56: Security Market Indices

LOS c: Discuss the choices and issues in index construction and management.

 

 

The first step in developing a security market index is choosing the index’s:

A) target market.

B) constituent securities.

C) weighting method.

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The first decision that must be made is choosing the target market the index will represent. Only then can the index provider determine which constituent securities should be included and which weighting scheme is most appropriate to measure the target market’s returns.