S&P 500 index
The A calculation using all of the observations of a variable with each observation being assigned a weight. The weight is the relative importance of that observation. Each observation is multiplied b... More of the prices of 500 fairly large companies. If the S&P 500 index were calculated by taking the average of the prices of the 500 companies, it would represent what most people consider an “average.” Instead, the S&P 500 index is calculated by first multiplying the price of each company by the number of shares outstanding for each company. The result of this multiplication is the market capitalization or market cap of a company. The index is calculated by taking the sum of the market caps and dividing by the total number shares of all of the companies. As such, the S&P 500 index is a A calculation using all of the observations of a variable with each observation being assigned a weight. The weight is the relative importance of that observation. Each observation is multiplied b... More of the prices of the companies, where the weight given to each company is its number of shares outstanding.
I am also a retired property-casualty A professional who assesses and manages the risks of financial investments, insurance policies and other potentially risky ventures. Source: www.investopedia.com/terms/a/actuary.asp More (someone who works with the math and statistics related to insurance). I spent a significant portion of my career building statistical models of all of the financial risks of an insurance company and interpreting their findings to help senior management make better financial decisions. I retired in my late 50’s, which one of my daughter’s friends thought clearly qualified me to write this blog. Read more about Susie Q