2006-10-10 07:13:07 · 4 answers · asked by Anonymous in Social Science ➔ Economics
The Dow Jones Industrial Average is one of several stock market indices created by Charles Dow who compiled the index as a way to gauge the performance of the industrial component of America's stock markets. It is the oldest continuing U.S. market index.
The DJIA is an index of 30 "blue-chip" U.S. stocks. It is computed by adding up stock prices and dividing by the number of stocks. The divisor are changing to preserve historical continuity.
Today, the average consists of 30 of the largest and most widely held public companies in the United States. To compensate for the effects of stock splits and other adjustments, it is currently a scaled average, not the actual average of the prices of its component stocks - the actual average of prices is multipled by a scalar, which changes over time, to generate the value of the index.♥
2006-10-10 11:15:15 · answer #1 · answered by ♥ lani s 7 · 1⤊ 0⤋
The 30 stocks in the index are added together and divided by the Dow Divisor. The Dow Divisor is currently about .125.
Since the index is an average, things like stock splits throw off the average because a companies stock price is lower but not the companies value. Therefore, the Dow Divisor changes slightly when necessary.
http://www.cbot.com/cbot/pub/cont_detail/1,3206,1556+8705,00.html
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2006-10-10 07:51:45 · answer #2 · answered by Zak 5 · 1⤊ 0⤋
just what it is ,an average of all the industry& corporations & business that make up the Dow.
2006-10-10 07:19:33 · answer #3 · answered by Tired Old Man 7 · 0⤊ 1⤋
What Iani said...I'm getting slow in my old age...
2006-10-10 13:37:31 · answer #4 · answered by Anonymous · 0⤊ 0⤋