Portfolio Construction

Price Weighting

Definition

What is Price Weighting?

Weighting index constituents according to their share prices.

Example in practice

A ₦200 share influences a price-weighted index more than a ₦20 share.

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The complete collection of investments owned by an investor or managed under one mandate.

The process of selecting and combining investments to meet return, risk, liquidity, and time-horizon objectives.

A long-term target mix of asset classes based on an investor's objectives and constraints.

A statistic ranging from minus one to plus one that describes how two return series move together.

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