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To: sea_biscuit who wrote (24052)8/23/2001 3:46:20 PM
From: TimF  Read Replies (1) | Respond to of 25814
 
But if the "S&P2" would record a return of 0% in that example and the real S&P 500 records its results in a similar way then the S&P index would seem to show a higher rate of return then the actual stocks or then real money invested in an index fund of the S&P 500 stocks.

In my example a "S&P 2 index fund" would have bought 1/3 A and 2/3 B. A doubles and B halves, then the index is adjusted for the new market caps. The actual return would be negative not 0%.

Tim