Which of the following are factors that make it difficult to create and maintain a bond index?
A) The universe of bonds is broader than stocks.
B) The universe of bonds is constantly changing due to new issues, bond maturities, calls, and bond sinking funds.
C) It is difficult to derive value, up-to-date prices.
D) Choices a and c
E) All of the above

Question

Quizplus · Accepted Answer

All of the factors listed make it difficult to create and maintain a bond index. The universe of bonds is much broader than stocks, which makes it challenging to narrow down an appropriate sample. The universe of bonds is continually changing due to new issues, bond maturities, calls, and bond sinking funds. Additionally, it is challenging to derive the value and up-to-date prices of bonds. All of these factors together make it difficult to create and maintain a bond index.

Which of the Following Are Factors That Make It Difficult