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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.
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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.
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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.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.


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.

Dictionary of Financial Terms. Copyright © 2008 Lightbulb Press, Inc. All Rights Reserved.


(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

The Complete Real Estate Encyclopedia by Denise L. Evans, JD & O. William Evans, JD. Copyright © 2007 by The McGraw-Hill Companies, Inc.
References in periodicals archive ?
The only substantial change in the industry structure of the production index was the redesign of the series for oil and gas field services, which was carried back to 1987.(3)
The MOEA's tallies show the production index for the manufacturing sector hit 113.95, up 15.38% year-on-year.
On annual basis in May 2017 Industrial Production Index calculated from working day adjusted data increased in the manufacturing by 13.5% and in the mining and quarrying industry by 6.1%, while in the electricity, gas, steam and air conditioning supply a decrease by 3.6% was seen.
The Value of Production Index or VaPI also grew 26.5 percent to reverse the contraction being posted since April last year.
26, 2011 (CENS)--Aided by surging outputs of high-tech and electronic industries, Taiwan's industrial production index hit a record high of 122.96 in 2010, surging 26.38% year-on-year, the highest growth of its kind in 40 years, according to the report issued by Ministry of Economic Affairs.
(ADPnews) - Feb 24, 2010 - The Austrian production index, adjusted for the number of working days, fell 4.6% year-on-year in December 2009, statistics office Statistik Austria reported Wednesday.
For manufacturing, the production index for August 2009 reached 63.3, recording a decrease of 11.0% compared with August 2008.
The group projects continued annualized growth of approximately 2% for total tire shipments through 2009, reflecting increases in the nation's gross domestic product (GDP) and industrial production index (IPI).
The production index for other durable consumer goods has changed little in the past two months and approximately equaled its average level in both 1994 and 1995.
According to the preliminary data of the National Statistical Institute, the Industrial Production Index decreased by 1.2% in April 2017 as compared to March 2017.
PNN The overall Quantity of Industrial Production Index (IPI) in the Palestinian Territory reached 116.36 in September 2012 (base month January 2011=100) with an increase of 6.66% compared to the previous month (August 2012).

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