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Capitalization Method

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Capitalization method
A method of constructing a replicating portfolio in which the manager purchases a number of the most highly capitalized names in the stock index in proportion to their capitalization.

Capitalization Method
A method of building a portfolio in which one enters a long position on the securities in some benchmark index in proportion to each security's market capitalization. For example, if the benchmark index has three stocks in it (one representing 50% of the capitalization of the index and the other two each representing 25%) 50% of a portfolio using the capitalization method would be composed of the first stock, while the rest would be equally divided between the other stocks.


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First, Income Capitalization Method involves the estimation of the property value by discounting future net income from the property.
Market Capitalization Method The market capitalization method (Temp.
The capitalization method served its purpose as a brake to an over-valuation and equalized the general optimism which was prevalent among the appraisers.
 
 
 
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