Determining the Accuracy of The Nairobi Stock Exchange 20-Share Index
Abstract
The study set out to determine the accuracy of the Nairobi Stock Exchange (NSF) 20-
Share index Then ·ed forth study emanated from the apparent weakness of the NSE
20- Share index to effectively report on the market performance as it is calculated using
unadjusted share prices and a geometric averaging method that has been statistically
proven to have a downward hias in the long run .
In addition. there is need for an alternative .
performance measure to have a balanced view ~
value movements in the NSE.
The derived indices were four in number: a Composite All-Share index, a 20-Share index
(Laspeyres method), a 20- Share index (Paasche method) and a 20-Share index (Fisher's
ideal method)
The. all used 1996 \\eek 14 as the base period and the base value was set at 3007 .39.the
value of the , E 20-Share indece in the same period. This figure was selected to provide
for uniformity and enable comparison among the indices.
Citation
Determining the accuracy of the Nairobi Stock Exchange 20-share index.Publisher
School of Accounting, Economics and Finance,University of Southern Queensland, Australia University of Nairobi School of Business,University of Nairobi, Nairobi, Kenya
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- School of Business [175]