Page 26 - FINAL CFA I SLIDES JUNE 2019 DAY 12
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Session Unit 13:
45. Security Market Indexes
Equal Weighting, p.224
An equal-weighted index places an equal weight on the returns of all index stocks, regardless of their prices
or market values. A $2 change in the price of a $20 stock has the same effect on the index as a $30 change
in the price of a $300 stock regardless of the size of the company. The return of an equal-weighted index
over a given period is often calculated as a simple average of the returns of the index stocks
tanties
