NISM Certifications · NISM-Series-XXI-A: Portfolio Management Services (PMS) Distributors · Investing in Stocks (NISM XXI-A)
Which of the following is a stock market index in India that is weighted using the free-float market capitalisation method?
The Nifty 50 uses free-float market capitalisation weighting. Each stock's weight depends on the market value of shares readily available for trading, excluding promoter and other locked-in holdings. The other choices describe price-weighted or equal-weighted approaches, not the Nifty method.
- ANifty 50Correct
- BPrice-weighted index of equal rupee prices
- CEqual-weighted gold index
- DSimple average of all share prices
Explanation
The Nifty 50 weights each constituent by its free-float market capitalisation, so shares held by promoters and other locked-in holders are excluded. The other options describe price-weighted, equal-weighted or simple average methods that are not used for Nifty 50.
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