I said Broad Market Index. The answer states this is a broad market index but has given the answer as a sector index.
Am I corect or have I looked at Qbank for so long that my mind has genuinely melted like hot butter?
The Top Banking Index contains stocks in the finance industry that represent more than 90% of the total market capitalization for the finance industry. The index is best described as a:
A) broad market index. B) sector index. C) style index.
Your answer: A was incorrect. The correct answer was B) sector index.
A sector index measures the returns for an industry sector such as financials. Style indexes measure the returns to strategies that are differentiated by market capitalization and by value or growth. A broad market index typically consists of constituent securities that represent 90% or more of the total market capitalization for a given market.