Security Market Index Flashcards
What are “Constituent Securities”?
With respect to an index, it is the individual securities w/in the index.
What is a “Price Return Index”?
An index that reflects only the price appreciation or price change in price of constituent securities.
Also called a price index.
What is a “Price Index”?
Represents the average prices of a basket of goods and services
What is a “Total Return Index”?
An index that reflects the price appreciation or percentage change in the price of constituent securities plus any income received since inception.
What is a Price Index’s Devisor?
A number (denominator) used to determine the value of a price return index; it is usually chosen at the inception of an index and subsequently adjusted by the index provider, as necessary, to avoid changes to the index value that are unrelated to changes in prices of its constituent securities.
What does “Rebalancing” mean?
in the context of asset allocation, a discipline for adjusting the portfolio to align with the strategic asset allocation.
What are multi-market indexes?
comprised of indexes from different countries, designed to represent multiple security markets.
What are “Sector Indexes”?
Indexes that represent and track different economic sectors - such as consumer goods, energy, finance, health care, and technology - on either a regional, national, or global basis.
