index


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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 ?
A category inflation index reflects the inflation that occurs in the BLS price indexes for a selected BLS category (or, if applicable, a BLS category group).
While there are truly good arguments to make against the S&P 500, how "Inscrutable Index Funds" became the cover story of the JofA I will never understand.
The performance gap between large-cap index funds and actively-managed blue chip funds is wider than for midcaps and small-caps, Kinnel said.
Remember, index funds need a minimum amount of management compared with growth or income funds, simply because index funds buy and hold stocks and don't engage in frequent portfolio shuffling.
Therefore, it was decided to seek the answer to two questions: Can the fatigue performance be further improved by further index reductions?
First assign the items to the most detailed index that contains those items.
Management must decide what overall index level is considered normal for the entire production process.
Stekler, "Diffusion Index and First Difference Forecasting," Review of Economics and Statistics, vol.
This deflator, in turn, has been incorporated into the index of industrial production, and the result has been a significant upward revision of the growth rate in the nonelectrical machinery industry (chart 3).
In addition, there will be changes for certain constituents resulting from the quarterly review of Domestic Inclusion Factors (DIFs) and quarterly updates in number of shares (NOS) for the MSCI China A Index, which will also be effective as of the close of February 28, 2007.
There are no new additions to or deletions from the MSCI US REIT Index during the Quarterly Index Reviews.
Effective as of the close of February 28, 2007, Powerchip Semiconductor (Taiwan) and Fording Canadian Coal (Canada) will be fully allocated to the MSCI Global Value Index Series.