1) A statistical yardstick that measures the economy. It is usually expressed as a percentage change from a base year or from the previous month. An example of an economy index is the Consumer Price Index. Using 1967 as its base year, the index consists of key consumer goods and services that measures price movements to changes in inflation rates. 2) Statistical measurement of groups of securities, industries or markets that reflect market prices and the number of shares outstanding for the companies in the index. Indexes may either be broad-based (a wide range of firms in many industries aiming to mirror the overall market) or narrow-based (consisting of securities from a specific industry). Stock indexes are used as a base for trading index options.

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