Question: Market - based weights are used because market value is the price an asset would fetch in the market, based on the price buyers are

Market

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based weights are used because market value is the price an asset would fetch in the market, based on the price buyers are willing to pay and sellers are willing to accept. Furthermore, market value is easier to determine for publicly traded instruments, such as stocks and futures, as their market prices are widely disseminated and easily accessible.

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