- Wealth PMS
How do you calculate the Price to Earnings of an Index? There are 50 stocks in the Nifty and there is not concept of a "Nifty share". So how does one figure out if an index as a whole is valued on a price-to-earnings multiple?
Answer: You just add up the market cap of all the stocks in the Index, and divide it by the sum of all the earnings of these stocks. It . . .