Advertisement
Online Test Banks
Score higher
See Online Test Banks
eLearning
Learning anything is easy
Browse Online Courses
Mobile Apps
Learning on the go
Explore Mobile Apps
Dummies Store
Shop for books and more
Start Shopping

How Financial Indexes Are Constructed

Part of the Trading Options For Dummies Cheat Sheet

To help understand financial index changes, you should know how indexes are built. Indexes are not created equal (well . . . one is). Financial indexes are constructed in three different ways:

  • Price-weighted: Favors higher-priced stocks

  • Market cap-weighted: Favors higher-cap stocks

  • Equal dollar-weighted: Each stock has same impact

blog comments powered by Disqus
Advertisement
Advertisement

Inside Dummies.com

Dummies.com Sweepstakes

Win an iPad Mini. Enter to win now!