ECONOMICS (CBSE/UGC NET)

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ECONOMICS

FINANCIAL MARKETS

Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
Consider the following statements:1.Sensex is based on 50 of the most important stocks available on the Bombay Stock Exchange(BSE). 2.For calculating the Sensex, all the Sensex stocks are assigned proportional weightage. 3.Sensex became operational in 1978-79 with the base value of 100. Which of the statements given above is/are correct?
A
2 only
B
1 and 3
C
2 and 3
D
None of the above
Explanation: 

Detailed explanation-1: -Sensex is based on 50 of the most important stocks available on the Bombay Stock Exchange (BSE). 2. For calculating the Sensex, all the stock are assigned proportional weightage.

Detailed explanation-2: –Formula of Sensex is applied; Sensex = (total free float market capitalisation/ base market capitalisation) * Base index value.

Detailed explanation-3: -S&P BSE SENSEX® is calculated using the “Free-float Market Capitalization” methodology. As per this methodology, the level of index at any point of time reflects the Free-float market value of 30 component stocks relative to a base period.

Detailed explanation-4: -The term Sensex refers to the benchmark index of the BSE in India. The Sensex is comprised of 30 of the largest and most actively traded stocks on the BSE and provides a gauge of India’s economy. It is float-adjusted and market capitalization-weighted.

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