Hi In Q3(ii)(b) it states that S&P 500 consists of investible shares, therefore is suited to portfolio benchmarking. The DJIA also contains investible shares, right? It is the fact that S&P500 is weighted by market cap and representative of the whole market that makes it suitable as a benchmark portfolio. Is the investible nature of shares just a bonus, not a necessity? Thank you, Rachael
Being a good benchmark isnt an either/or, and there are many things that make an index good. Being market cap weighted is a very important one. Having investible shares is another. Having a broad spread of shares is a third, which the Dow doesnt satisfy.
