Hi there,
question about CFA Mock Morning Q# 82.
“Assuming the beginning value of the float-adjusted market-capitalization-weighted equity index is 100, the ending value is closest to:”
They are asking about the value of the float-adjusted market-capitalization-weighted equity index.
I included the dividends here. Apparently this is not correct.
Do we always exclude the dividends doing this calculation? I don’t read anything abou a Price or Total return here…
Thanks in advance!
market cap is only the market cap. you do not need anything else. so if a market cap is 100 Mill, float value = 0.65 -> for the purposes of the calculation -> you would use 65 mill.
Bump. Can someone clarify this? I saw some exercises where they ask “Price return” with market-cap weighting. But if the exercise as OP comments says “float-adjusted with market-cap”, do we always need to ignore dividends?
In the question it doesn’t really specify whether it’s price return or total return.
Bumping again. Any reason why we don’t take into account dividends?
The question asks about the value of the index - the CFA text equations for index value do not include the dividends.
It you had been asked about “priice return” or “total return” then dividends would be exluded or included in the return calculation.
Alright thank you.