Question
5. You decide to create an equity portfolio and you put the same amount of money in 100 shares of stocks of firms. If you
5. You decide to create an equity portfolio and you put the same amount of money in 100 shares of stocks of firms. If you wished to construct an index to track your portfolio performance your best match for your portfolio would be to construct a(n) ______.
A.Value weighted index - Better indicator of overall change in wealth in economy is probably
better measured by VW
B.Equal weighted index - If you invest equal dollar amounts in each stock, then EW is a better
benchmark for you
C.Price weighted index - The amount of money invested in each company in that portfolio is
therefore proportional to the company share price
D.Bond price index
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