What Is the Purpose of Investment Analysts Dividing the Universe

question 17

Multiple Choice

What is the purpose of investment analysts dividing the universe of listed companies into small cap, medium cap and large cap companies?

• A) It is required to meet various government regulations.
• B) It measures whether certain sectors are outperforming others.
• C) It is done in order to calculate the stock market indexes.
• D) It determines which companies qualify for the small business deduction.
• E) It is used by the TSX to try to get more listings.

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Definitions:

Division

A mathematical operation representing the process of dividing one number by another to find a quotient, often shown with the symbol "/" or "÷."

Simplify

In mathematics, to reduce an expression or equation to its simplest form, making it easier to handle or understand.

Solution

A value or set of values that makes an equation true.

Equation

A mathematical statement that asserts the equivalence of two expressions, represented by the symbol =.