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MCQ Detailed View

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1 FINANCE MCQS

The type of index where current stock values are added together and divided by the stock value on the base date is called __________.

  • Value-weighted index
  • Herring weighted index
  • Primary market index
  • Stock market index
Correct Answer: D. Stock market index

Detailed Explanation

A stock market index is a statistical measure that shows how the overall market or a specific segment is performing. In this method, the current stock values of selected companies are added together and then divided by the stock value on the base date. This calculation provides a benchmark to compare present market performance with past performance. Investors, analysts, and policymakers use stock market indices to track trends and make investment decisions.

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