Stock Market Indices

Question 1

What are they

Answer 1

Simple way of summarising market movements

Question 2

Two types of how indies constructed and weighted

Answer 2

• Price weighted

- Value weighted

Question 3

Price Weighted

Answer 3

• Sum of market price per shares / no of companies
• Biased towards higher priced shares ; higher share price dominates index

examples ; DSIA + Nikkei 25

Question 4

Value Weighting

Answer 4

• Sum of market capitalisation / number of companies
• Market Cap = market price of share x no of shares
• Biased towards the performance of larger companies

Question 5

UK Stock Market Indices

Answer 5

FTSE 100

FTSE 250

FTSE 350

FTSE All Share Index

FTSE 250 - Doesn’t include FTSE 100

Question 6

x3 US Stock Market Indices

Answer 6

Dow Jones Industrial Average (DIJA)

Standard Poor’s (S&P)

Nasdaq Composite

Question 7

Dow Jones

Answer 7

US Index

30 Companies

Price Weighted

Question 8

Standard Poor’s (S&P)

Answer 8

500 Companies

Question 9

Nasdaq Composite

Answer 9

over 3,000 companies

Question 10

Japan Market Indices

Answer 10

Nikkei - 225 Companies

Question 11

Germany Market Indices

Answer 11

Xetra Dax - 30 companies

Question 12

France Market Indices

Answer 12

CAC - 40 companies

Question 13

Hong Kong Indices

Answer 13

Hang Sang

Variable number of companies

Question 14

How often is FTSE reviewed

Answer 14

Quarterly

Question 15

FTSE All Share Index percentage of equity turnover by value

Answer 15

98%