What Are Stock Market Index/Indices?
Stock market indices are the shares of a specific group chosen based on specific factors such as the frequency of trading, the size of shares and so on. The stock market employs the method of sampling to depict the direction of the market as well as the changes by means of an index. To help you comprehend the concept more clearly Let's start with the most basic of questions, what is an index of the market? Stock Market Index Meaning An index of the stock market is a type of statistical instrument that tracks the evolution of the market for financial instruments. Indices are indicators that represent the performance of one particular segment of the market , or the entire market. An index of the stock market is constructed by selecting specific stocks from similar companies or ones that meet the predefined requirements. The stocks are already traded and listed on an exchange. Market indices for shares can be developed based on a variety of criteria for selection including segments,...