What is meant by an indexing portfolio strategy

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In this module we learned to explain how market reactions to pricing anomalies help support the "no-arbitrage condition" on which some models are based, show how the multi-factor model along with the no-arbitrage condition helps explain the risk-return relationship, examine the implications of the efficient market hypothesis for investment policy, and generalize the importance of behavioral finance in explaining market pricing anomalies.

Lets extend the discussion by examining the practical implications of these concepts. What is meant by an indexing portfolio strategy and what is the justification for this strategy?

Reference no: EM13847965

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