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Index

Statistical composite that measures changes in the economy or in financial markets, often expressed in percentage changes from a base year or from the previous month. Indexes measure the ups and downs of stock, bond, and some commodities markets, in terms of market prices and weighting of companies in the index.

Index

A statistical measure of the value of a certain portfolio of securities. The portfolio may be for a certain class of security, a certain industry, or may include the most important securities in a given market, among other options. The value of an index increases when the aggregate value of the underlying securities increases, and decreases when the aggregate value decreases. An index may track stocks, bonds, mutual funds, and any other security or investment vehicle, including other indices. An index's value may be weighted; for example, securities with higher prices or greater market capitalization may affect the index's value more than others. One of the most prominent examples of an index is the Dow Jones Industrial Average, which is weighted for price and tracks 30 stocks important in American markets.

index

The relative value of a variable in comparison with itself on a different date. Many security price indicators such as the Standard & Poor's series and the New York Stock Exchange series are constructed as indexes. Also called stock index. See also base period.

index

To adjust a variable by a selected measure of relative value. For example, it has been proposed that an investor's basis on a security be indexed for changes in consumer prices so that only real increases in value will be taxed. Also called tax indexing. See also subindex.

Index.

An index reports changes up or down, usually expressed as points and as a percentage, in a specific financial market, in a number of related markets, or in an economy as a whole.

Each index -- and there are a large number of them -- measures the market or economy it tracks from a specific starting point. That point might be as recent as the previous day or many years in the past.

For those reasons, indexes are often used as performance benchmarks against which to measure the return of investments that resemble those tracked by the index.

A market index may be calculated arithmetically or geometrically. That's one reason two indexes tracking similar markets may report different results. Further, some indexes are weighted and others are not.

Weighting means giving more significance to some elements in the index than to others. For example, a market capitalization weighted index is more influenced by price changes in the stock of its largest companies than by price changes in the stock of its smaller companies.

index

(1) A statistical indicator that measures changes in the economy in general or in particular areas.An example is the cost-of-living index.(2) A reference point against which measurements are taken for purposes of making future adjustments.An adjustable-rate mortgage might begin with an interest rate of 6 percent and provide that it will increase or decrease in a like percentage as the increase or decrease between today's quoted price for 10-year U.S.Treasury bonds and the price on the loan's annual anniversary date.We would say that 10-year T-bonds are the index.

Some leading loan indices include

• Wall Street Journal prime
• Federal discount rate
• Fed funds rate
• 11th District Cost of Funds
• 10-year Treasuries
• One-year LIBOR

References in periodicals archive ?
Each of these indices will be designed with an eye toward being liquid enough to serve as the basis for potential investment products.
IMaCS has launched a range of indices such as ICRA Gilt Indices, ICRA Liquid Indices and ICRA Corporate Bond Indices.
All four new indices can be segmented by size and by sectors.
Additional information, including current spread and daily CDS price changes, on the S&P/ISDA CDS Indices is available on the ISDA CDS Marketplace(SM) and S&P Indices.
The index family consists of 12 headline indices that cover major global regions and countries.
All four new indices can be segmented by size and by sectors, and will be available on request to eligible clients directly from MSCI Barra in early October.
Under the deal, S&P DJI will assume the marketing and commercial licensing of the BMV indices with the intent to jointly create new indices with the BMV.
All securities in the Global Investable Market Indices are classified into Value or Growth segments using the current MSCI Global Value and Growth methodology.
S&P Dow Jones Indices said it launched fourteen new equity indices covering thirteen African markets providing investors in Africa, as well as those outside, with an offering of indices measuring the performance of the African equity markets.
MSCI Barra has posted the Global Investable Market Indices methodology book, including the transition plan, on its website at http://www.
GENEVA -- MSCI Barra, a leading provider of benchmark indices and risk management analytics products, announced today changes to the MSCI Standard Index Series that will be effective as of the close of February 28, 2007.
NEW YORK -- MSCI Barra, a leading provider of benchmark indices and risk management analytics products, announced today changes to the MSCI US Equity Indices that will be effective as of the close of February 28, 2007.

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