Question
Which of the following statements is incorrect? Select one: a. A price-weighted index is biased towards the highest-priced share b. In a value-weighted index, a
Which of the following statements is incorrect? Select one: a. A price-weighted index is biased towards the highest-priced share b. In a value-weighted index, a 10 percent share price increase for a large-cap company would affect the index less than would a 10 percent share price increase for a smaller company. c. The performance of a value-weighted index would represent the performance of a portfolio that owns all the outstanding shares of each index component. d. The performance of a price-weighted index represents the performance of a portfolio that simply bought and held one share of each index component. e. The performance of an equal-weighted index represents the performance of a portfolio in which the same amount of money is invested in the shares of each index component.
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