In a price-weighted index changes in the price of a company's stock with _____ would tend to influence the index _____ than changes in a _____ .
A) higher capitalization; less; growth stock
B) a higher stock price; more; stock of a company with a lower price.
C) a higher stock price; less; stock of a company with a lower price.
D) a lower P/E; more; stock's price.

Question

Quizplus · Accepted Answer

In a price-weighted index, the stocks with higher prices have more influence on the index's movements than those with lower prices, regardless of the company's market capitalization or growth prospects.

In a Price-Weighted Index Changes in the Price of a Company's