1) Can the observable index be a stock market index if my company is one of the companies listed in the index?
No. There can be no other factor other than the company itself. In this case the stock of other companies is part of the observable index which does not meet the criterion.
2) Can the observable index be a benchmark interest rate if all my company’s borrowings are done based on that index?
No. A benchmark index reflects a number of market factors that have nothing to do with your entity, including inflation and general economic conditions. While these factors may also impact the operations of your company, a benchmark rate is not a measure that is determined solely by reference to your company’s operations.