Indexes in Business: Definition, Use & Examples


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The most fundamental purpose of an index in business is to facilitate:

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1. Because it compiles data from several other indexes, the Consumer Price Index would be considered a/an _____ index.

2. Rachel is a portfolio manager for a major financial advising firm. She is currently advising a client with regard to the purchase of mortgage-backed securities. As she conducts research, Rachel references an index that looks at mortgage data for the last 10 years. Assume that the current year is 2019. What year would be considered the index's base year?

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About This Quiz & Worksheet

See what you already know about indexes in business. Questions in this resource test your knowledge of their purpose, types, and requirements.

Quiz & Worksheet Goals

Review your understanding of these topics:

  • Identifying the base year of an index
  • A related calculation often made before making a purchase
  • The central purpose of an index in business is to facilitate this
  • Business type most likely to need a non-aggregated index for making projections
  • Type of index related to the Consumer Price Index

Skills Practiced

This resource can help you train these skills:

  • Information recall - access the knowledge you've gained regarding the base year of an index
  • Interpreting information - verify that you can read information regarding the Consumer Price Index and interpret it correctly
  • Making connections - use understanding of the concept of a non-aggregated index and business types

Additional Learning

By using the accompanying lesson to this quiz or worksheet, Indexes in Business: Definition,Use & Examples, you can learn more about:

  • Common indexes and data
  • The definition of aggregation bias
  • Meaning of leading indicator and lagging indicator