ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -NEPSE considers market capitalization of Group A Companies to calculate sensitive index. For to calculation of sensitive index: market capitalization of Group A shares is divided by base period’s market capitalization and multiplies by 100.

Detailed explanation-2: -To determine the weight of each stock in a value-weighted index, the price of the stock is multiplied by the number of shares outstanding. For example, if Stock A has five million outstanding shares and is trading at $15, then its weight in the index is $75 million.

Detailed explanation-3: -A capitalization-weighted index, also known as a market value-weighted index, is a type of stock market index in which individual components of the index are included in amounts that correspond to their total market capitalization (shortened as “market cap").

Detailed explanation-4: -The index is calculated as the weighted arithmetic mean with a fixed basket in the base period preceding the comparison period (Laspeyres formula).