Equity Market Indexes Flashcards
1
Q
What is an index?
A
A portfolio of stocks
2
Q
What are the 2 most popular indexes in U.S.?
A
S&P 500, and Dow jones
3
Q
What is a stock market index?
A
is the composite vale of a group of secondary market traded stocks
4
Q
What is the price weighted index?
A
The DJIA which is composed of the top 30 companies of the dow jones industrial average. This is the most well known stock market index
5
Q
What does the adjustment factor do?
A
Adjusts for stock splits
6
Q
What is a major problem with the price weighted index?
A
When they do not value based on the number of shares
7
Q
Value weighted indexes are also known as?
A
Cap weighted indexes
8
Q
Which is the most popular index for small cap?
A
Russell 2000
9
Q
Which is better? A price weighted index of a value weighted index?
A
A value weighted index
