Question

You decide to purchase an equal number of shares of stocks of firms to create a portfolio. If you wished to construct an index to track your portfolio performance your best match for your portfolio would be to construct a/an ______.
A. value weighted index
B. equal weighted index
C. price weighted index
D. bond price index

Answer 1

Answer:

Price weighted index

Explanation:

A price weighted index is an index used in stocks where each company that is part of the index makes up a fraction of the total, and is proportional to its price per share.

Higher weight is given to sticks that have higher prices.

Rice weighted index is a good way to track track portfolio performance that best match for your portfolio.