Doing the CFAI 2015 PM session. #25 asks you which type of index returns the hightest (given the data set). They’ve said value weighted at 13.5% (which I calculated as the return). I calculated the equal-weightd index at 13.7% though and they’ve given the answer as the value weighted index. Anyone else catch this, or am I losing it somewhere?
Should mention, I just caculated the equal weighted index return as the arithmetic average of the change in market cap (furthest column on the right).
yep, some other guy on here mentioned this too. I think the issue lies in that the % change in market cap is typically the same as the % change in price. But in this instance it is not.
It might be something to do with share issues during the year. In any case, I hope the CFA realise that there is a nasty trick to this question.