Test your knowledge 38 (Equity)

An index fund is planning to track Dow-30. It investes 1/30th on the portfolio in each of the Dow 30 stocks. Will the index fund track Dow accurately ? Cheers :slight_smile:

No, the Dow is price weighted so an equally weighted portfolio will not (perfectly) mimic the Dow’s performance.

yeah go ahead and put 1/30th into C

with all respect, there is a special block after each chapter exactly for this kind of questions please stop garbaging the forum

Using naive diversification, no.