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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 ?
FTSE Russell is a global index provider creating and managing a wide range of indexes, data and analytic solutions to meet client needs across asset classes, style and strategies.
MSCI Global Investable Market Indexes: There will be 418 additions to and 300 deletions from the MSCI ACWI IMI.
Some librarians have questioned the quality of automated indexes, feeling that no software could match the intellectual needs of indexing.
"Dow Jones Indexes is the first and currently only international index provider authorised by Tadawul to use real-time data of the Saudi stock market.
For a video presentation explaining the new indexes, visit: www.ambest.com/video/ambindexes.
While software has been an asset in calculating internal indexes, the variability of products can make valuing base-year costs of new products an undue administrative burden.
While there are no Japan-specific global SRI indexes, there are 114 companies included in the major sustainability index benchmarks such as the Dow Jones World Sustainability Index (35 companies), the FTSE4Good (87 companies) and the Ethibel Sustainability Index (25 companies).
The granddaddy of indexes, the Standard & Poor 500 is an index of 500 stocks chosen for market size, liquidity and industry group representation.
It indexes the database using a combination of bit map and inverse list indexes and creates both multidimensional and aggregate indexes.
The February diffusion index of leading indexes logged a figure above the boom-or-bust line of 50% for the 12th consecutive month.
With these weighted values then aggregated into one or a small number of indexes, this index would provide a single number for comparison against other periods to determine changes in the value of the dollar.
I doubt there exists a professor teaching microeconomics who does not routinely demonstrate this characteristic of fixed-weight price indexes to his or her classes.