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Unweighted Index

Unweighted Index Definition

This is a mathematical average used to determine stock indexes. Equal weight is invested in each of the stocks and equal dollar amounts invested in each underlying stock. Because the stocks are equally weighted, one stock's performance will not have a dramatic effect on the performance of the index as a whole. This differs from weighted indexes, where some stocks are given more weight than others, usually based on their market capitalizations.

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Stock market index
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