Home > Indices > FAQs   FAQs Basics What should a stock market index be? What do the ups and downs of an index mean? What is the basic idea in an index? What kind of averaging is done? What is the portfolio interpretation of index movements? Why are indices important? What kinds of indices exist? Index construction Isn't averaging like diversification; cancelling out vulnerability to one stock? Then a larger number of stocks in an index will give more diversification -- isn't that a good thing? Why don't we put all the stocks of the country into the index? Component illiquidity contaminates index What is wrong with the price information for illiquid stocks? A stock may be liquid on one exchange and illiquid on another -- what price do you take when calculating the index? What is `stale prices'? What is `bid-ask bounce'? What about market manipulation - how would manipulation of an index take place, and how would an index be made less vulnerable to manipulation? So diversification yields diminishing returns, and illiquid stocks are best kept out of an index.... what is the ideal middle road? The S&P CNX Nifty How does the S&P CNX Nifty work? What is `impact cost'? What do you mean by `an S&P CNX Nifty trade'? What's the impact cost on Rs.5 million of the full S&P CNX Nifty? Index revision Why does the index keep changing from time to time? When a stock goes out and a new stock comes in, doesn't that make index levels non-comparable? Index revision sounds dangerous in terms of political pressures. Won't speculators try to push a stock they have purchased into the index? Or remove a stock from the index when they are shorting it? High quality information How is the S&P CNX Nifty closing price calculated? What is special about the NSE closing price? What about dividends? You say that buying a S&P CNX Nifty portfolio yields the same returns as percentage changes on the S&P CNX Nifty index. But the weights will have to keep on changing from day to day when market caps change? So when do weights in an index change? What historical data for the S&P CNX Nifty is available? Where do I get data for the S&P CNX Nifty? Index funds What index should be used for index funds? What index funds are available on the S&P CNX Nifty? Index Futures What about index futures? What is hedging effectiveness? Why not form a small portfolio of the ten most liquid stocks, and work to ensure that the small portfolio is maximally correlated with the S&P CNX Nifty? Alternatives to the S&P CNX Nifty How does the S&P CNX Nifty compare with other indices? Parents How did the S&P CNX Nifty come about? Where does IISL come in? Who is Standard & Poors, and why does their name appear with the S&P CNX Nifty's? What does CNX in "S&P CNX Nifty" stand for? We sometimes hear the term `nifty fifty' used in the US to denote a certain set of growth stocks. Is there any connection? Siblings What's S&P CNX Defty? What's S&P CNX 500? What's CNX Nifty Junior? What's CNX MidCap? What's CNX Segment Indices? What's CNX IT Index? Top