Weighted aggregate price index calculation
A price-weighted index is simply the sum of the members' stock prices divided by the number of members. Thus, in our example, the XYZ index is: $5 + $7 + $10 + $20 + $1 = $43 / 5 = 8.6. Why Does a Price-Weighted Index Matter? The Nasdaq 100 Index is 100 of the largest companies listed on the Nasdaq exchange. It is a weighted index based on market capitalization, although the index caps how much of a weight any individual stock can have. The Nasdaq 100 Equal Weight Index has an equal weight of 1% assigned to each of the 100 components. The Laspeyres Price Index is a consumer price index used to measure the change in the prices of a basket of goods and services relative to a specified base period weighting. Developed by German economist Etienne Laspeyres, the Laspeyres Price Index is also called the base year quantity weighted method.