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Username: Peter

Rating:
Guru Stars

Asked to: Tom Burke

Date Created: 24 Apr 2017
Category 46
Tag Financial
Question What is an 'Index'?
Advice from Guru
Hello Peter,

An index is an indicator or measure of something, and in finance, it typically refers to a statistical measure of change in a securities market. In the case of financial markets, stock and bond market indices consist of a hypothetical portfolio of securities representing a particular market or a segment of it. (You cannot invest directly in an index.) The S&P 500 and the US Aggregate Bond Index are common benchmarks for the American stock and bond markets, respectively. In reference to mortgages, it refers to a benchmark interest rate created by a third party.

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