The Constant value is calculated to price the basket to = 1.0000 as of 01/01/2014
What is this Index?
The VARIANSE AUD/NZD Index provides a measure of the Australasian Economy
Australia and New Zealand have one of the most open economic and trade relationships of any two countries.
This is based on a comprehensive set of trade and economic arrangements, collectively known as Closer Economic Relations (CER),
which underpin substantial flows of merchandise trade, services, investment, labour and visitors between the two countries.
Considering that New Zealand has a market economy that depends greatly on international trade, mainly with Australia, the AUD/NZD Index provides
a broad based measure of benchmarking both economies.
N = Number of components
Pair N = Market price of Nth Pair
2. Then we multiply the value A by the constant factor*
*A constant factor is used to turn the basket into an
index which sets the value of the basket to usually
equal 1 or 100 at a pre-determined date in the past,
this allows for easier tracking and simpler pricing.