请教

问题如下：

An increase in shares held by controlling shareholders most likely impacts the constituent weightings of a(n):

选项：

A.price-weighted index.

B.equal-weighted index.

C.float-adjusted market-capitalization-weighted index.

解释：

Solution

1. Incorrect because in price weighting, the weight on each constituent security is determined by dividing its price by the sum of all the prices of the constituent securities, which means the lower free float (due to increased weight of controlling shareholders) has no impact on constituent weights.

2. Incorrect because the equal weighting assigns an equal weight to each constituent security at inception, which means the lower free float (due to increased number of shares held by controlling shareholders) has no impact on constituent weights.

3. Correct because float-adjusted market-capitalization-weighted indexes reflect the shares available for public trading [excluding the ones held by controlling shareholders] by multiplying the market price per share by the number of shares available to the investing public (i.e., the float-adjusted market capitalization), which means constituent weights are impacted.

Security Market Indexes

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