Assume that the compiler of A stock index has selected 6 stocks A, B, C, D, E and F as the sample stocks. The base period index is 100, and the base period is fixed on March 1, 2006. The number of shares of each stock and the base period closing price are shown in Table 1 below:
weight, the outstanding shares of A, B, C, D and E account for one-third of the total share capital, while the outstanding shares of F account for only one-sixth of the total share capital. Discuss the disadvantages of this method of weight selection.
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