weighted index

weighted index
An index where the impact of each of the index constituents is weighted, usually by reference to the market value of each constituents. To give a simple illustration, an index of two companies, where the first company has a total market capitalisation of £3,000 and a share price of £3.00 and the second company has a market capitalisation of £6,000 and a share price of £6.00 would have a weighted value of £5.00 (3/9 W 3.00 + 6/9 W 6.00). By contrast, an unweighted index would have a value based on the simple average of £4.50. Most indices are market capitalisation weighted. Dresdner Kleinwort Wasserstein financial glossary

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weighted index weighted index index1

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weighted index UK US noun [C] FINANCE, STOCK MARKET
an index that takes into account the importance of particular things, for example the amount of trade between each of the countries involved: »

The Russell 2000 Index TR is a total return weighted index.


On the Reserve Bank's Trade Weighted Index the Australian dollar ended on Friday at 55.6, down from 56.8 the previous week.

Financial and business terms. 2012.

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