SP/ASX200 Index Changes and Volatility: Understanding the Impact on Portfolio Managers

Every quarter, S8P announces changes to the constituents of the SP/ASX200 market index. This forces index-tracking portfolio managers to make large trades to ensure that their portfolios continue to track the index. These trades would most likely result in: a. An increase to fundamental volatility. b. A decrease to transitory volatility. c. Other. d. A decrease to fundamental volatility. e. An increase to transitory volatility

e. An increase to transitory volatility