They can go beyond the index composition or their respective weights. A. True B. False
Question
They can go beyond the index composition or their respective weights.
A. True
B. False
Solution
The statement "They can go beyond the index composition or their respective weights" is related to the investment strategies and methods used in financial markets, particularly regarding index funds and the weights assigned to individual assets within these indexes.
The correct answer to the statement is:
B. False
This is because index funds are designed to track the performance of a specific index, which means they should adhere closely to the index's composition and respective weights. Deviations from this structure typically occur in actively managed funds, but the statement as it stands suggests a misunderstanding of how index funds operate. Index fund managers aim to replicate the index rather than exceeding its stated weights.
Similar Questions
True or false: The calculation of the portfolio beta is similar to the calculation of the portfolio weights.True false question.TrueFalse
Difficulty index is based on calculation of two indices, that is, the discrimination index and the difficulty index.Question 6Answera.trueb.false
rue or false: The expected return of a portfolio is a combination of the weights of each asset in a portfolio.True false question.TrueFalse
Compilation is a process that ensures that a program is syntactically correct, and also ensures its logical correctness. The above statement is _____TrueFalse
True or False: In a stack implemented using an array, the size of the stack is fixed, andelements can only be added or removed from the top of the stack.
Upgrade your grade with Knowee
Get personalized homework help. Review tough concepts in more detail, or go deeper into your topic by exploring other relevant questions.