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State the factors to consider when computing stock..

      

State the factors to consider when computing stock index.

  

Answers


Kavungya
1. Choice of base year on which to base the price changes
2. The selection of representative securities/firms
3. Combining the securities/firms to construct the index eg use of geometric mean
4. Use of suitable weight to be attached to the securities depending on their relative importance.
5. The weights/number of firms in a sector is kept constant over a reasonably long period.
Kavungya answered the question on March 12, 2019 at 05:38


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