CFA Level I Security Market Indices Video Lecture by Mr. Arif Irfanullah

This CFA Level I video covers concepts related to:
• Overview
• Price Weighted Index
• Equal Weighted Index
• Market Capitalization Weighted Index
• Fundamental Weighting
• Rebalancing and Reconstitution
• Uses of Indices
• Equity Indices
• Fixed Income Indices
• Alternative Investment Indices
For more updated CFA videos, Please visit www.arifirfanullah.com.

[@remuslupinhp]

thanks ur videos are really good help and they well complement the readings to bring out clarity and better understanding...

[@leomessi9414]

You didn't explain an example on market CAP. How do we calculate the market Cap weighting index? Is it just the Sum of (Price * Shares) or you divide it on the base period also?

[@miloni266]

First PWI is 66.67
Second PWI is 85
They haven't subtracted 85 from 66.67.
It is (85-66.67)/66.67*100

[@md.faysalkhandokar2589]

the calculation can also be done as [85/66.67] -1 = 27%

[@leomessi9414]

Damn this brother is smart!

[@anjalisrinivas8964]

the last part of market capitalisation weighting is known as free float market capitalisation which in turn has a different notation

[@kshitijneekhra7301]

There are some parts ambiguous in the video
Giving some idea about it might help.
In price weighted index the investment is proportional to price
Ex : It would be 50% A , 25% B, 25% C
In Equal weighted the investment is equally weighted for all three I.e, 33% for A,B and C
In Market Cap Weighted the investment is proportional to mkt cap
Say you have $100k so 200mil:800mil I.e, 1:4 In proportional which means 20% A and 80 %B out of total $100k
Also P/E is not same as Mkt value/ earnings ,still unclear about that

[@natalieliao977]

since the first PWI is 66.67, and the sec PWI is 85, from 66.67 to 85 is 27% increase...

[@Courier12]

yeah i didnt get why is that 27% either -_- then that theory doesnt hold if PWI gives less than EWI

[@silkykala962]

I am facing problem in problem 14 of the practice exercise. Can you please explain me the solution of the problem.

[@mahfuzarasul8120]

on the Fundamental section
How did we get 10% and 20% for A and B...?

[@cedricnkuna9561]

thanks

[@IFT-CFA]

You are most welcome!

[@BboyGraphicx]

Thank you, much appreciated Mr Irfanullah

[@IFT-CFA]

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[@rahulbelose8611]

Good job....keep it up....Thanks

[@Alice-gl6um]

Great video!

[@IFT-CFA]

Thank you so much.
IFT support team

[@soukainaashour6217]

Great that helped alot 👍🏻

[@IFT-CFA]

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[@kedabhairocks]

How was the PWI return 27% ? Did not get that part

[@md.faysalkhandokar2589]

the calculation can also be done as [85/66.67] -1 = 27%

[@kedabhairocks]

ShouLdn't the PWI return 21 and not 27 ?

[@md.faysalkhandokar2589]

the calculation can also be done as [85/66.67] -1 = 27%

[@ashachauhan3596]

give some more examples