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Which one of the following is the primary flaw of a price-weighted index? A) Price-weighted indexes ignore stock splits which affect stock prices. B) The
Which one of the following is the primary flaw of a price-weighted index?
A) Price-weighted indexes ignore stock splits which affect stock prices. | ||
B) The effect a company has on the index is dependent solely on the price per share. | ||
C) Only a small number of stocks can be included in a price-weighted index. | ||
D) If the number of shares outstanding of an index stock changes, the index divisor must be recomputed. | ||
E) The index can only be computed once the trading day is over. |
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