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).