The _____ method to weight a market index is computed daily by multiplying the level of the index on the previous day by the arithmetic mean of the daily price relatives of the relevant stocks in the index.
A) Geometric-mean
B) Price-weighting
C) Value-weighting
D) Equal-weighting

Question

Quizplus · Accepted Answer

The equal-weighting method involves averaging the daily price relatives of the stocks, which aligns with the description of using the arithmetic mean to compute the index level.

The _____ Method to Weight a Market Index Is Computed