Question

Index

In your own words please describe what an index is and offer potential positive and negative aspects of using an index.

Answer 1

An index is associate degree indicator or live of one thing, and in finance, it usually refers to a applied math live of modification in a very exchange. In the case of monetary markets, stock and bond market indices encompass a hypothetic portfolio of securities representing a specific market or a phase of it. (You cannot invest directly in associate degree index.) The S&P five hundred and also the United States country|North American nation} combination Bond Index square measure common benchmarks for the American stock and bond markets, severally. In regard to mortgages, it refers to a benchmark rate created by a 3rd party.

BREAKING DOWN Index:
Each index associated with the stock and bond markets has its own calculation methodology. In most cases, the relative amendment of associate index is additional vital than the particular numeric price representing the index. For example, if the money Times securities market (FTSE) a hundred is at half dozen,670.40, that variety tells investors the index is almost seven times its base level of one,000. However, to assess however the index has modified from the previous day, investors should look into the number the index has fallen, typically expressed as a proportion.

negatives:

1)Data from some developing countries might not be terribly reliable and should be tough to verify.
2)The measures chosen could seem terribly absolute to some as a result of there area unit alternative means of activity relative qualities in health and education.
3)Similar criticism of GDP, that it doesn't live unequal distribution at intervals the country.

No indication within the education index concerning access to education for all teams in society
I.e. continuation of made students through education will hide the very fact that it I tough for youngsters of poorer families to enter primary education.

positives:
1)There is widespread use of HDI to compare development levels and it does reveal clear global patterns.
2)Does not only consider economic development, and takes into consideration that there are other, more social, ways to measure human development.
3)Increase in education associate degreed health shows an improvement in a very countries infrastructure.
Like my post on GDP, there'll be varied amounts of positives and negatives. Should you think I have missed out some out, then please message me. Otherwise, I’ll update as and when. I hope this helps.