In calculating the Dow Jones Industrial Average, the adjustment for a stock split occurs ________.
A) automatically
B) by adjusting the divisor
C) by adjusting the numerator
D) by adjusting the market value weights

Question

Quizplus · Accepted Answer

The adjustment for a stock split in the Dow Jones Industrial Average is made by adjusting the divisor. The divisor is adjusted to maintain the continuity of the Index so that the split does not affect the value of the Index. The adjustment for a stock split is automatic and does not require any intervention in the numerator, market value weights or any other aspect of the calculation.

In Calculating the Dow Jones Industrial Average, the Adjustment for a Stock