There is a bias against growth stocks in both a price weighted and a capitalization-weighted index.

Question

Quizplus · Accepted Answer

In a price-weighted index, stocks with higher prices have more influence, regardless of the company's size, which doesn't inherently bias against growth stocks. In a capitalization-weighted index, larger companies have more influence, which can actually favor large growth stocks as they increase in market capitalization.

There Is a Bias Against Growth Stocks in Both a Price