Hand Associates manages two portfolios that are meant to closely track the returns of two stock indexes One index is a value weighted index of 500 stocks in which the weight for each stock depends on the stock 's total market value The other index is an equal weighted index of 500 stocks in which t...

Hand Associates should use stratified random sampling for its portfol ...

Hand Associates manages two portfolios that are meant to closely track the returns of two stock indexes.

Question:

Hand Associates manages two portfolios that are meant to closely track the returns of two stock indexes. One index is a value-weighted index of 500 in which the weight for each stock depends on the total market value. The other index is an equal-weighted index of 500 in which the weight for each stock is 1/500. Hand Associates invests in only about 50 to 100 in each in order to control transactions costs. Should Hand use simple random sampling or stratified random sampling to choose the in each Stocks
Stocks or shares are generally equity instruments that provide the largest source of raising funds in any public or private listed company's. The instruments are issued on a stock exchange from where a large number of general public who are willing... Portfolio
A portfolio is a grouping of financial assets such as stocks, bonds, commodities, currencies and cash equivalents, as well as their fund counterparts, including mutual, exchange-traded and closed funds. A portfolio can also consist of non-publicly...