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CFA Level 1 - Equity Investments
Beginner
1/5
What is a potential limitation of security market indices constructed using a fixed number of securities?
a.
They are more susceptible to the impact of corporate actions like stock splits or dividends
b.
They tend to have higher turnover and transaction costs compared to market-cap weighted indices
c.
They may not accurately represent the overall market due to the limited number of securities included
Beginner