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IndexIn the stock market, an index is a device that measures changes in the prices of a basket of shares, and represents the changes using a single figure. The purpose is to give investors an easy way to see the general direction of shares in the index.The FTSE 100, for example, is calculated by taking a weighted average of the share prices of the largest 100 companies on the London Stock Exchange. Launched in 1984 with a base figure of 1,000, the FTSE is calculated continuously throughout the trading day. When the media report that 'FTSE climbed 37 points today' you don't know exactly which shares in the index climbed and which fell, but you get an immediate idea of the direction of the market.Index funds base their investment decisions on tracking the companies in a particular index.IndexStatistical 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 the index.Index Similar MatchesMarket value weighted indexMarket value weighted indexAn index of a group of securities computed by calculating a weighted average of the returns on each security in the index, where the weights are proportional to outstanding market value. Index modelIndex modelA model of stock returns using a market index such as the S&P 500 to represent common or systematic risk factors. Big Mac IndexBig Mac IndexAn index of PPP exchange rates based solely on the prices of the Big Mac sandwich in McDonald's restaurants around the world, published each spring by the Economist. Enhanced indexingEnhanced indexingAlso called indexing-plus, an indexing strategy whose objective is to exceed or replicate the total return performance of some predetermined index. Morgan Stanley Capital International Europe IndexMorgan Stanley Capital International Europe IndexA market capitalization-weighted benchmark index made up of equities from 15 European countries. France, Germany, and the United Kingdom represent about two-thirds of the index. Further SuggestionsConsumer price indexconsumer price index Jensen index Pure index fund Inflation indexed securities EAFE index Arms index FTSE 100 Index Bond Buyers municipal bond index Grantor Grantee Index Lehman Brothers Corporate Bond Index Emerging Markets Free index (EMF) Indexed Stock Options Morgan Stanley Capital International World Index Money Flow Index Russell Indexes Export price index Present Value Index (PVI) Buying the index Trading Index TSE 300 (Toronto Stock Exchange 100 index) All Ordinaries Index Standard and Poor's 500 Index Stratified sampling bond indexing OEX index |
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