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Finance Dictionary and Glossary of Investment Terms
index
Definition 1.
A statistical indicator providing a representation of the value of the securities which constitute it. Indices often serve as barometers for a given market or industry and benchmarks against which financial or economic performance is measured.
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Definition 2.
A statistical measure of change in an economy or a securities market. In the case of financial markets, an index is essentially an imaginary portfolio of securities representing a particular market or a portion of it. Each index has it's own calculation methodology and is usually expressed in terms of a change from a base value. Thus, the percentage changes is more important that the actually numeric value. For example, knowing that a stock exchange is at, say, 5000 doesn't tell you much. However, knowing that the index has risen 30% over the last year to 5000 gives a much better demonstration of performance. The plural of index can be spelled either indexes or indices.
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Definition 3.
tatistical 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.
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