Which best describes what a market index does?

Question

An index measures market performance.
An index measures economic trends.
An index measures growth.
An index measures the performance of a single stock.

Answer 1

The statement that best describes what a market index does is: An index measures market performance.

Market indices, like the S&P 500 or Dow Jones Industrial Average, aggregate the performance of a selected group of stocks to provide an overall view of market trends and performance.