1. Sensex is based on 50 of the most important stocks available on the Bombay stock Exchange (BSE).
2. For calculating the Sensex, all the stocks are assigned proportional weightage.
3. The New York Stock Exchange is the oldest stock exchange in the world.
Which of the statements given above is/are correct?
Explanation
Statement 1 is incorrect: The BSE Sensex (S&P BSE Sensex) is based on 30 of the most actively traded and financially strong stocks on the Bombay Stock Exchange (BSE), not 50.
Statement 2 is incorrect: In Sensex calculation, stocks are as-signed weightage based on free-float market capitalization, not proportional weightage. This means stocks with higher market capitalization and more freely tradable shares have a greater impact on the index.
Statement 3 is incorrect: The New York Stock Exchange (NYSE) is one of the largest stock exchanges but not the oldest. The Amsterdam Stock Exchange (Netherlands), established in 1602, is considered the world’s oldest stock exchange. As per Bombay Stock Exchange (BSE) reports, the Sensex is widely used as a benchmark index for tracking the performance of the Indian equity market.