Chapter 3: Security Market Indexes

In this section

• Index Construction and Weighting Methods
  Index Construction and Weighting Methods (CFA Level 1): Role of Security Market Indexes in Portfolio, Steps in Index Construction, and Defining the Target Market or Segment. Key definitions, formulas, and exam tips.
• Types of Equity Indexes
  Types of Equity Indexes (CFA Level 1): Broad Market Indexes, Key Characteristics, and Multi-Market Indexes. Exam-focused explanations with key terms and takeaways.
• Rebalancing, Reconstitution, and Index Changes
  Rebalancing, Reconstitution, and Index Changes (CFA Level 1): Rebalancing Essentials, Frequency and Methodologies, and Reconstitution: Keeping the Index Fresh. Key definitions, formulas, and exam tips.
• Applications of Indexes in Passive vs. Active Investing
  Applications of Indexes in Passive vs. Active Investing (CFA Level 1): Passive Investing, Benefits of Passive Funds, and Typical Structures. Key definitions, formulas, and exam tips.
• Factor-Based Equity Indexes
  Factor-Based Equity Indexes (CFA Level 1): Understanding Factor-Based Equity Indexes, Core Concepts of Factor Investing, and Rationale for Factor-Based Indexing. Key definitions, formulas, and exam tips.
• Impact of Cross-Listings on Global Equity Indexes
  Impact of Cross-Listings on Global Equity Indexes (CFA Level 1): Defining Cross-Listing, Impact on Global Equity Indexes, and Index Calculation Challenges. Key definitions, formulas, and exam tips.
• Use of Thematic and Sector-Focused Indexes
  Use of Thematic and Sector-Focused Indexes (CFA Level 1): Defining Thematic and Sector-Focused Indexes, Thematic Indexes, and Sector-Focused Indexes. Key definitions, formulas, and exam tips.
• Style and Factor Investing Approaches
  Style and Factor Investing Approaches (CFA Level 1): Growth vs. Value, Growth Investing, and Value Investing. Key definitions, formulas, and exam tips.
• Advanced Weighting Schemes (Equal Risk Contribution, etc.)
  Advanced Weighting Schemes (Equal Risk Contribution, etc.) (CFA Level 1): Test Your Knowledge: Advanced Weighting Schemes and Which statement best describes the core objective of. Key definitions, formulas, and exam tips.
• Liquidity Traps in Index Investing
  Liquidity Traps in Index Investing (CFA Level 1): Defining Liquidity Traps in Index Investing, Key Points to Remember, and How Liquidity Traps Arise. Key definitions, formulas, and exam tips.