NISM Certifications · NISM-Series-XV: Research Analyst · Introduction to Securities Market
Which of the following is a feature of the Sensex as a market index?
The Sensex is a free-float market capitalisation weighted index of 30 large and actively traded companies listed on BSE. It is not equally weighted, not price-weighted, and not a bond index. Companies with larger free-float market value therefore influence its movement more.
- AIt is a free-float market capitalisation weighted index of 30 large companies listed on BSECorrect
- BIt is an equally weighted index of 50 companies on NSE
- CIt is a price-weighted index of all BSE-listed companies
- DIt tracks only government bond yields
Explanation
The S&P BSE Sensex comprises 30 large, well-established BSE-listed companies and is weighted by free-float market capitalisation. The 50-stock equal-weighted description does not fit, as Nifty 50 is an NSE index and is also free-float weighted. It is not price-weighted and not a bond index.
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