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3. Uses of Market Indices

g. describe uses of security market indices;

What are five uses of security market indices? 1. For predicting future market movements by technicians. 2. To measure market rates of return in economic studies. 3. As a proxy for the market portfolio of risky assets. 4. As benchmarks to evaluate the performance of professional money managers. 5. To create and monitor an index fund or an exchange-traded fund (ETF).