Which of the Following Is NOT an Important Consideration to Take

question 10

Multiple Choice

Which of the following is NOT an important consideration to take into account when building an index?

• A)face validity.
• B)balance between general and specific
• C)perfectly correlated components.
• D)unidimentionality
• E)variance

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Definitions:

Stockholders

Individuals or entities that own shares in a corporation, giving them partial ownership and potentially a claim on part of its profits.

Limited Partners

Investors in a partnership whose liability is limited to the amount of their investment, without direct management responsibilities.

Realized Capital Gain

The profit earned from the sale of an asset that has increased in value over the time it was held.

Market Value

The current price at which an asset or service can be bought or sold in an open market.