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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.


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.


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.


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.


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.


(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 ?
Taxpayers electing the IPIC method can now use 100% of the pool index--now called the inventory price index (IPI)--to compute the LIFO value of a dollar-value pool.
I'm a bit confused about the information shown in exhibit 4, "S&P 500 Composition by Capitalization," of "Inscrutable Index Funds.
The most common is the index mutual fund, which buys companies that comprise a particular index.
In that regard, a striking aspect of the hearings that the subcommittee held last year was the virtual unanimity that a price index that tracks the cost of purchasing a fixed market basket of goods and services, such as the CPI now does, represents an upper bound on changes in the true cost of living.
As simple as it sounds, the performance of index funds is no laughing matter, particularly in the eyes of many mutual fund managers out there.
A relatively small, but significant, effect of TDI index on density has also been observed.
There will be no additions to the MSCI US Mid Cap 450 Index and the MSCI US Small Cap 1750 Index.
472-8 was recently issued to "simplify and clarify certain aspects of the IPIC method," as well as to modify the method, so that it "produces a more accurate and suitable inventory price index.
Setting up a nonfinancial performance index is very intuitive; as such, a description of the concept sounds more complex than it really is.
After all, movements in the general price index will certainly influence their anticipated future payments, and indexed debt represents an asset that at least keeps pace with the price index.
Effective as the close of February 28, 2007, Beijing North Star A will be added to both the MSCI China A Value Index and the MSCI China A Growth Index with partial weight.
The interpretation of diffusion indexes is straightforward: A value of 50 indicates that over the interval spanned by the diffusion index the proportion of series posting increases was equal to the proportion that declined, whereas a reading of more than 50 means that more series rose than declined.