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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 ?
Daniel, "Are there better indices for evaluation purposes than the h index?
At each rebalancing, the weights of the underlying indices are reset to the weights above.
The three indices within the S&P Pan Arab Shari'ah Balanced Index Family are:
25 July 2014 - New York-based financial market indices provider S&P Dow Jones Indices one of the world's providers of financial market indices said it has launched S&P Quality Indices.
Summary: MSCI Barra (NYSE:MXB), a leading provider of investment decision support tools worldwide, including indices and portfolio risk and performance analytics, announced today the addition of four new indices to its MSCI Gulf Cooperation Council (GCC) Countries & Arabian Markets Indices family, which was launched in January 2006.
Index arbitrage is a trading strategy by which a trader aims to make a profit by exploiting small differences, at a given time, between prices of stocks and derivative investments on the same index or exchange or--more often--on different indices or exchanges.
The capitalization turnover ratios (one-sided) for the Total Value and Growth indices are low at less than 10% (see Chart 2).
A licensing agreement to make the indices available as underlying for exchange-traded funds is expected to be signed soon.
S&P Dow Jones Indices today (7 February) announced the launch of S&P GIVI Shariah Indices, the first Shari'ah-compliant indices, combining low volatility and an alternative weighting scheme that weight's a stock by its calculated intrinsic value, rather than by market capitalisation.
Best is pleased to publish a series of exclusive stock indices that will provide readers with a useful benchmark for assessing investor confidence in the insurance industry.
(TSE) will join IIA in promoting awareness of the function of indices in global markets.
The indices are particularly designed to underlie exchange-traded products, the firm said.

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