A Value Weighted Index Automatically Adjusts for Stock Splits

question 7

True/False

A value weighted index automatically adjusts for stock splits.

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Definitions:

Bearing Risk

The act of accepting potential loss from uncertainty in investment or business operations.

Unexpected Returns

Returns on an investment that exceed what is predicted by models or expected based on historical trends, often caused by unforeseen factors or events.

Expected Returns

The anticipated amount of profit or loss an investor predicts to receive from an investment, taking into account the possibility of fluctuating values.

Unsystematic Risk

The hazard pertaining to an individual business or field, which can be reduced by diversifying assets.