What is an Index?

An index is a statistical representation of the value of securities with certain charactertistics that make it up. An index often serves as a barometer for a given market or industry and benchmark against which financial or economic performance is measured. For example, the S&P 500 Index is a basket of 500 stocks that are considered to be widely held by investors and provide a broad snapshot of the overall U.S. equity market. 


See Also:

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Indices Are Good to Know 

What Does it Mean to ‘Short’ a Stock? 

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