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