7 – L1 05 Market Cap V2

So far we’ve seen some major indices that track a large collection of stocks, from big to small with different sectors such as technology or banking. What if we wanted a more refined look at just the smaller companies or what if we wanted to track just high-growth companies. Having a more specific index would help if our investment research is focused on companies with similar characteristics. Index creators often make indices that group stocks by market capitalization defined as large-cap, mid-cap or small-cap. Market capitalization or market cap of a company is its number of shares outstanding times the price per share. In other words; market cap is the market value of the company.

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