Index movements are influenced by differential prices of the components in a(n)
A) equally-weighted index.
B) price-weighted index.
C) unweighted index.
D) value-weighted index.
E) over-weighted index.

Question

Quizplus · Accepted Answer

In a price-weighted index, the index movements are influenced by the price changes of its components, as each stock contributes to the index in proportion to its price.

Index Movements Are Influenced by Differential Prices of the Components