VARIANSE Precious Metals Index
The Constant value is calculated to price the basket to = 100.00 as of 01/01/2014
What is this Index?
The VARIANSE Precious Metals Index tracks the value of Gold and Silver versus the US Dollar
Gold and Silver are widely considered as an insurance against inflation and provide a hedge against the devaluation of a currency.
The Precious Metals Index is designed to provide a broadly representative benchmark of the worlds most precious non industrial metals.
Additionally the Index can be used to:
> Provide a relative measure of inflation
> Provide an indication of the value of the ratio of Gold and Silver
How is the FX Index Calculated?
Now for the maths...
1. First we calculate the
Geometric Mean (GM) of the Basket
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.