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Risk

Demystifying Market Indices

Index Construction, Equity and Fixed Income Indices, and Market Efficiency

1 CPD credit on completion
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Certificate on completion
Downloadable resources
Self-paced learning

About This Course

Course Information

The learning outcomes from this CPD refresher course include: How index calculations are made Understanding alternative investment indices Explaining fixed income and equity indices What is a well functioning market

Certificate on Completion

This course is made up of videos, questions and additional reading materials, and accounts for 1 unit of CPD. One unit is the equivalent of one hour of learning.

Course Sections

This course is made up of the following sections:

  • Well functioning financial markets (video)
  • Well functioning financial markets (quiz)
  • Use of security market indices (video)
  • Use of security market indices (quiz)

What You Will Learn

  • Explain the characteristics of a well-functioning financial system, including operational, informational, and allocational efficiency
  • Describe how security market indices are constructed, managed, and rebalanced over time
  • Compare price-weighted, market-capitalisation-weighted, equal-weighted, and fundamental-weighted index methodologies
  • Distinguish between equity indices, fixed income indices, and alternative investment indices
  • Identify the role of regulatory bodies in maintaining fair and efficient markets
  • Explain the contrarian effect of fundamental weighting and how it shifts portfolio weights during rebalancing

Who This Course Is For

  • Finance professionals who work with market benchmarks and need to understand how indices are built and maintained
  • Accountants and auditors who encounter index-linked products in client portfolios
  • Anyone preparing for FRM or CFA exams who wants a focused refresher on security market indices

Prerequisites

  • Basic familiarity with financial markets and common asset classes (equities, bonds)
  • No prior knowledge of index construction or methodology is assumed

Frequently Asked Questions

Course Details

CPD Credits1
CertificateYes

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