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What Is the Difference Between Equal Weighting and Unequal Weighting

question 56

Essay

What is the difference between equal weighting and unequal weighting of performance criteria? When might unequal weighting be a better choice for a criterion?


Definitions:

Interest Rate Futures

Financial derivatives contracts that obligate the buyer to purchase an asset (like Treasury bills or bonds) at a future date at a predetermined interest rate.

Spot Market

A financial market in which commodities or financial instruments are traded for immediate delivery.

Treasury Notes Futures

Financial contracts obligating the buyer to purchase and the seller to sell U.S. Treasury notes at a predetermined future date and price.

Interest Rates

The cost of borrowing or the return on savings, often set by a central bank, influencing economic activity.

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