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标题: CFA1, Reading 48 [打印本页]

作者: Sunshine4ever    时间: 2013-4-21 12:35     标题: CFA1, Reading 48

Practice Problem 20 on p. 118 and Answer on p. 123
Can somebody explain the answer? I do not think it is correct.
作者: therecruit    时间: 2013-4-21 12:39

The question:
Which of the following index weighting methods requires the most frequent rebalancing?
A. Price weighting.
B. Equal weighting.
C. Market-capitalization weighting.
Answer in the book:
B is correct. Changing market prices will cause weights that were initially equal to become unequal, thus requiring rebalancing.
I do not understand, how to adjust the weight of 1/N.




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