How relevant is equity index calculation?

CFA Level III Equities
#1

Hi All

I attended a revision session with my prep provider last night, who outlined a list of the ‘big number question’ topics and their respective study sessions.

Along with the regular Implentation shortfall, corner portfolios, required required (IPS) etc he mentioned the calculation for equity indices? For example, the value of a price weighted index, the value of a market cap weighted index and how to calculate them.

I raise this on Analysform because I have not seen any question on this during the last 5 months! Is this relevant for L3?

Thanks!

#2

I believe there was one such a question in the online practice questions of CFAI. It required a calculation of return based on market cap, price and equal weighted portfolios. Not index value/construction though.

#3

Be prepared for it.

They are really straight forward so should be easy marks in the exam if they come up

#4

I just had a look through the Schweser book and I can’t find any information on how to calculate it!

#5

Ok I found it in the CFAI text panic=over!

#6

Its in Equity Reading (BB eg)