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Question:

Given that an equal‐weighted index and a market‐capitalization‐weighted index consist of the same securities, underperformance by small‐cap stocks will most likely result in the market‐ capitalization‐weighted index exhibiting:

A A greater price return than the equal‐weighted index.
Explaination

In an equal‐weighted index, large‐cap stocks are underrepresented and small‐cap stocks are overrepresented compared to a market‐capitalization‐weighted index. Therefore, underperformance by small‐cap stocks will not affect a market‐capitalization‐weighted index as much as it would an equal‐weighted index, and lead to the market‐capitalization‐weighted index having a greater price return than the equal‐weighted index.