What is a market index? - Marketing – 2019


A market index is a concept of the financial sector used daily on stock exchanges around the world: the markets for stocks, bonds and other types of financial instruments or securities. However, understanding a market index requires first of all understanding the meaning of a market index.

What is an index?

According to Investor words, an index is "a statistical indicator that provides a representation of the value of the securities that make it up". The S & P 500 index is an example.

What is a market index?

A market index is therefore an index that represents the values ​​of a particular market. In other words, "it measures the price changes of an overall market, like a stock market or a bond market," says Investor words.

The point of the market index

A point in a market index is a concept used to measure the value of the securities listed in the index. However, the point will have a different meaning depending on whether it is a stock market index or a bond market index

Point: stock market index

When referring to stock and equity indices, a "point" is equivalent to $ 1.
Point: index of the bond market

When referring to bond and bond market indices, a "point" equals $ 10 because each price of a bond is actually at a rate of $ 1,000.

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