115 CFA
File: Equity Investments - Reading 37 - 3. Uses of Market Indices

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).

  • CFA