Which One of the Following Is the Primary Flaw of a Price-Weighted

question 59

Multiple Choice

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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Definitions:

Value-Driven Culture

An organizational culture that emphasizes and prioritizes core values in its decision-making, behavior, and strategy, fostering a unified and principled workforce.

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Quantitative Approaches

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