Free-float market capitalization-weighted index: Difference between revisions
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Free-float market capitalization is calculated as: | Free-float market capitalization is calculated as: | ||
<math> \text{Free-float Market Capitalization} = \text{Share Price} \times \text{Free-float Shares Outstanding} </math> | <math> | ||
\text{Free-float Market Capitalization} = | |||
\text{Share Price} \times \text{Free-float Shares Outstanding} | |||
</math> | |||
The weighting assigned to each constituent is determined by: | The weighting assigned to each constituent is determined by: | ||
<math> | |||
\text{Company Weight} = | |||
\frac{\text{Company Free-float Market Capitalization}} | |||
{\text{Total Free-float Market Capitalization of the Index}} | |||
</math> | |||
As a result, companies with larger investable market capitalizations have a greater influence on the movement of the index. | As a result, companies with larger investable market capitalizations have a greater influence on the movement of the index. | ||