The ASX's Share Price Indices Are

question 7

Multiple Choice

The ASX's share price indices are:

• A)the sum of the share prices of the constituent companies
• B)weighted by share turnover
• C)weighted by market capitalisation
• D)the sum of the share prices of the constituent companies divided by the number of shares
• E)all accumulation indices.

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Definitions:

Compound Interest

This refers to the calculation of interest on the beginning balance of a loan or deposit, adding in the interest that has built up over time from prior periods.

Present Value

The value as of now of a future amount of money or subsequent cash flows, based on a chosen return rate.

Compound Interest

Interest that is determined by taking into account not only the original principal of a deposit or loan but also all the interest that has been compounded in previous cycles.

Earnings Rate

The return on an investment or the amount of profit made compared to the amount of money invested.