What is the primary function of a stock market index?

To track the performance of every listed company. To provide a real-time overview of the overall market sentiment. To predict future stock prices with high accuracy. To determine the creditworthiness of individual companies.

Which of the following best describes the relationship between a rising stock market index and investor sentiment?

Investors are pessimistic about the future. Investors are uncertain about the future. Investors are optimistic about the future. There is no correlation between the index and investor sentiment.

How can a stock market index be used for benchmarking?

To compare the performance of individual stocks against each other. To evaluate the performance of a portfolio against the overall market. To determine the intrinsic value of a company. To predict the volatility of a particular stock.

What is the most common method used in India to construct stock market indices?

Price-weighted average Equal-weighted average Free-float market capitalization Fundamental analysis

What does a sector-specific index represent?

The performance of all companies listed on a particular stock exchange. The sentiment and trends within a specific industry or sector. The overall health of the global economy. The credit rating of companies within a specific sector.