A good
example of price weighted index is Dow Jones Industrial Average.
Not exact matches
The Nasdaq share
price index, for
example, which contains a high
weighting of such stocks, is around all - time peaks, and up over 35 per cent from its level at the start
of 1999.
(In the internet bubble, for
example, as internet stocks went up in
price, market cap -
weighted indexes became too heavily concentrated in this overpriced sector and too underweighted in the stocks
of established companies in less exciting industries.)
The Dow Jones Industrial Average, for
example, is nothing more than a
price -
weighted market index
of 30 blue chip stocks.
Included in the PowerPoint: Macroeconomic Objectives (AS Level) a) Aggregate Demand (AD) and Aggregate Supply (AS) analysis - the shape and determinants
of AD and AS curves; AD = C+I+G + (X-M)- the distinction between a movement along and a shift in AD and AS - the interaction
of AD and AS and the determination
of the level
of output,
prices and employment b) Inflation - the definition
of inflation; degrees
of inflation and the measurement
of inflation; deflation and disinflation - the distinction between money values and real data - the cause
of inflation (cost - push and demand - pull inflation)- the consequences
of inflation c) Balance
of payments - the components
of the balance
of payments accounts (using the IMF / OECD definition): current account; capital and financial account; balancing item - meaning
of balance
of payments equilibrium and disequilibrium - causes
of balance
of payments disequilibrium in each component
of the accounts - consequences
of balance
of payments disequilibrium on domestic and external economy d) Exchange rates - definitions and measurement
of exchange rates - nominal, real, trade -
weighted exchange rates - the determination
of exchange rates - floating, fixed, managed float - the factors underlying changes in exchange rates - the effects
of changing exchange rates on the domestic and external economy using AD, Marshall - Lerner and J curve analysis - depreciation / appreciation - devaluation / revaluation e) The Terms
of Trade - the measurement
of the terms
of trade - causes
of the changes in the terms
of trade - the impact
of changes in the terms
of trade f) Principles
of Absolute and comparative advantage - the distinction between absolute and comparative advantage - free trade area, customs union, monetary union, full economic union - trade creation and trade diversion - the benefits
of free trade, including the trading possibility curve g) Protectionism - the meaning
of protectionism in the context
of international trade - different methods
of protection and their impact, for
example, tariffs, import duties and quotas, export subsidies, embargoes, voluntary export restraints (VERs) and excessive administrative burdens («red tape»)- the arguments in favor
of protectionism This PowerPoint is best used when using worksheets and activities to help reinforce the ideas talked about.
For
example, Greenblatt's book talked about the merits
of a 50/50
weighting between Good Company and Good
Price.
One
of the problems with cap -
weighting (for
example, the S&P 500 index is cap -
weighted) is that cap -
weighting gives more
weight to stocks that have gone up in
price and gotten more expensive.
(In the internet bubble, for
example, as internet stocks went up in
price, market cap -
weighted indexes became too heavily concentrated in this overpriced sector and too underweighted in the stocks
of established companies in less exciting industries.)
For
example, the Sears Shop Your Way Mastercard comes with a decent sign - up bonus
of $ 150 for new cardholders who spend at least $ 2,000 in the first 30 days
of account opening, plus extended warranty and
price protection to help safeguard your new
weight rack or cable trainer.
For
example, some software publishers lower the
prices of download versions, giving
weight to the fact that download versions can not be sold to secondhand stores or that download versions are rarely sold at reduced
prices in retail stores and even sometimes never discounted in the case
of direct sales by the publishers.
For
example, Piero Manzoni's Consacrazione dell «arte dell «uovo sodo (Artistic consecration
of the hard - boiled egg, 1959), which he signed with an imprint
of his thumb, or his cans
of shit (1961) whose
price was pegged to the value
of their
weight in gold, satirizing the concept
of the artist's personal creation and art as commodity.
Instead
of each coin being
weighted by their current
price, as in our Dow Jones
example, they will be
weighted by market capitalization.