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Market-value Weighted Index

A stock exchange index in which a greater weighting is given to shares of companies that have a larger market capitalization so they have more influence on index movements than the shares of companies with a lower market capitalization. The S&P500 and the Nasdaq Composite are examples of market value indexes. Market value indexes can also be float weighted. This means that only those shares, which can potentially be publicly traded are used in the calculation of a company's market value. Shares, which are closely held, for example by a national government, are excluded. The S&P500 and France's CAC-40 are float weighted indexes.

See also: Price Weighted Index

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