###### Asked in Index Funds and ETFsInvestment TheoryDow Jones Industrial Average

Index Funds and ETFs

Investment Theory

Dow Jones Industrial Average

# What is weighted index?

**We need you to answer this question!**

###### If you know the answer to this question, please register to join our limited beta program and start the conversation right now!

## Related Questions

###### Asked in Stock Market

### What is the difference between value weighted index and equal weighted index?

Value weighted index is a market average such as Standard &
Poor's 500 Index that takes into account the market value of each
security rather than calculating a straight price average. An equal
weighted index is a type of weighting that gives the same weight,
or importance, to each stock in a portfolio or index fund. The
difference is one gives individual value and other gives one value
to all.

###### Asked in NASDAQ

### Is the NASDAQ market-weighted?

###### Asked in Mathematical Analysis

### How do you work out the index number?

Index numbers are usually expressed by setting some selected
value as 100 and converting all other numbers to an index relative
to that base.
So, for a simple index, if the value y(0) is set to 100, then
the index for the value y(k) is y(k)/y(0)*100.
The calculations become more complicated if the index is for a
collection of items. In such cases, a number of different
"sub-indices" need to be combined together. The combined index is
calculated as a weighted average of the component sub-indices, with
the weights based on the importance of each su-index in the base
period (base-weighted) or in the current period
(current-weighted).

###### Asked in Stock Market

### What is bond index?

###### Asked in Stock Market, Mutual Funds

### Which are better market cap weighted index funds or equal weight index funds?

Market weight index funds weight the individual company's within
the index by market capitalization (shares outstanding multiplied
by share price). Equal weight index funds give equal weight in the
fund to each company, regardless of its share price. When measuring
the performance of each of these types of index funds there is no
clear winner. Researchers Dash and Loggie found each type of fund
outperformed during different market conditions. The S & P 500
equal weight index fund underperformed the market capitalization
weighted fund during strong markets but seemed to perform better
than the market cap weighted fund during weak markets.

###### Asked in Stock Market

### What is waightage of stocks?

###### Asked in Stock Market

### What is the sensex and nifty?

NSE Index or NIFTY:
The NSE Index or the Nifty Index as it is popularly known, is
the index of the performance of the 50 largest & most
profitable, popular companies listed in the index. Each company
that is part of the index has its own weightage in the value of the
Index. The value of the Nifty Index is the weighted average of the
prices of these 50 companies.
BSE Index or SENSEX:
The BSE Index or the Sensex as it is popularly known, is the
index of the performance of the 30 largest & most profitable,
popular companies listed in the index. Each company that is part of
the index has its own weightage in the value of the Index. Since
the number of companies is lesser, the index variations are higher
when compared to the Nifty index.

###### Asked in Math and Arithmetic

### Is it the arithmetic mean or weighted mean that is more accurate Why?

The arithmetic mean and the weighted mean are used in different
situations. The arithmetic mean is used in frequencies as a general
average. The weighted mean is used when different factors
contribute to some kind of total for example with weighted index
numbers.
It is not a matter of accuracy it involves using the right mean
in the right situation. Almost always (if not always) a question
will specify which mean to use.

###### Asked in Index Funds and ETFs

### How do you calculate a cap weighted index?

A Market Cap weighted index is calculated a lot like a school
teacher weighs grades. Example: Quiz: 20%
Homework: 20%
Final Paper: 60% So if you got a 80% on your quiz, a 90% on your
homework and a 70% on your final your grade would be:
80(.2)+90(.2)+70(.6)= 76% (as compared to 80% without weight) So
for a weighted market cap index if you have 3 companies A, B, and
C, and each is a different size, then the idea is the largest
companies have the largest effect on the total "weighted" result.
Conversely the smaller companies will have a smaler effect; in much
the same way that your homework matters less than your final in our
imaginary school.

Load More