INDEX DEFINITION AND CALCULATIONS OF VALUE AND RETURNS

• A security market index represents a given security market, market segment, or asset class.
•  Most indices are constructed as portfolios of marketable securities.
• The value of an index is calculated on a regular basis using either the actual or estimated market prices of the individual securities, known as constituent securities,within the index.
• For each security market index, investors may encounter two versions of the same index (i.e., an index with identical constituent securities and weights):one version based on price return and one version based on total return. 
• As the name suggests, a price return index, also known as a price index, reflects only the prices