Aggregate securities prices may be measured by using value-weighted or geometric averages.

Question

Quizplus · Accepted Answer

Aggregate securities prices can indeed be measured using value-weighted (also known as market capitalization-weighted) or geometric averages, among other methods. Value-weighted indexes give more weight to companies with higher market capitalizations, while geometric averages multiply the prices of the securities and then take the nth root (where n is the total number of securities).

Aggregate Securities Prices May Be Measured by Using Value-Weighted or Geometric