prashantsahni

Market cap weighted indices as compared to float adjusted indices give:

A) higher weight to lower float companies with large cross-holdings of shares.

B) higher weight to lower float companies with small cross-holdings of shares.

C) lower weight to higher float companies with large cross-holdings of shares.

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Market cap weighted indices weigh companies based on market cap and not float. Those companies that have lower float would then get higher weight when the index is market cap weighted and not adjusted for float. Lower float is caused by large cross-holdings of shares (among other things).