Equity Investments Q86
0. Which of the following is least likely a characteristic of fundamental weighting of an index?
- Option : B
- Explanation : Fundamental indices use a single measure, such as total dividends, to weight the constituent securities. Fundamentally weighted indices generally will have a contrarian “effect” in that the portfolio weights will shift away from securities that have increased in relative value and toward securities that have fallen in relative value whenever the portfolio is rebalanced. All shares are included in a fundamental weighted index.
