Find out what an Index is

I’m glad this was shared by in their “Term of the day”. It just reminded me of a question I was asked by a blog reader this weekend. He asked.. I hear Index traded securities, Index Linked Bonds etc.. what at all is an Index.

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. ”

In Ghana for instance, the GSE Composite Index (GSE CI) is a form of Index including all listed companies. The Financial Stock Index (GSE FI) is another that includes all financial  (banks etc) companies listed. 


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