Since the DJIA is price weighted, stock splits must be accounted for in its calculation to prevent artificial volatility.
Adam Hayes, Ph.D., CFA, is a financial writer with 15+ years Wall Street experience as a derivatives trader. Besides his extensive derivative trading expertise, Adam is an expert in economics and ...
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The stock indices reflect the performance of the stock market. Therefore, they are popularly known as the barometer of the stock market. The value of stock indices is determined based on some values.
Originally, the Dow Jones Industrial Average was the average dollar value of the 12 stocks this index fund contained. As time went on, the calculations got more complicated. Stocks have been added and ...