n NISM Certifications
XXI NISM Series XXI-A
Medium

Identify which of these is a definite advantage of a value-weighted index:

Practice question from NISM XXI A for PMS - Mock Test 4 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. Weight bias

    Correct answer

  2. B

    Downward bias

  3. C

    Size bias

  4. D

    Recency bias

Why this is the answer

Larger companies have more influence, which might introduce a bias toward big-cap stocks.

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