 In particular, if the price of any of the constituents were to fall to zero, the whole index would fall to zero.That is an extreme case; in general the formula will understate the total cost of a basket of goods (or of any subset of that basket) unless their prices all change at the same rate.Also, as the index is unweighted, large price changes in selected constituents can transmit to the index to an extent not representing their importance in the average portfolio.