What is a common use of bond Indexes in the securities industry?

Bond indexes are widely used in the securities industry to constructbond index funds, which aim to replicate the performance of the bond market or a specific segment of it.

A (Provide liquidity)refers to market-making activities, not bond indexes.

B (Direct purchase)is uncommon, as bond indexes are benchmarks rather than individual investments.

D (Assess credit risk)is achieved through credit rating agencies, not bond indexes.

References:Volume 1, Chapter 7 ("Bond Indexes")​.

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