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What is the primary purpose of creating stock indices?
  • a)
    To provide investment advice to individual investors
  • b)
    To facilitate passive investment strategies
  • c)
    To eliminate the need for stock trading
  • d)
    To encourage speculative trading
Correct answer is option 'B'. Can you explain this answer?
Most Upvoted Answer
What is the primary purpose of creating stock indices?a)To provide inv...
One of the primary purposes of creating stock indices is to facilitate passive investment strategies. Investors can use these indices as benchmarks to construct portfolios that closely resemble the performance of the index. This approach is known as passive investing and is designed to match the returns of the index. Therefore, Option B is the correct answer.
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What is the primary purpose of creating stock indices?a)To provide investment advice to individual investorsb)To facilitate passive investment strategiesc)To eliminate the need for stock tradingd)To encourage speculative tradingCorrect answer is option 'B'. Can you explain this answer?
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