Which of the following is true of the Dow Jones Industrial Average?
A) It is a value-weighted average of 30 large industrial stocks.
B) It is a price-weighted average of 30 large industrial stocks.
C) The divisor must be adjusted for stock splits.
D) It is a value-weighted average of 30 large industrial stocks, and the divisor must be adjusted for stock splits.
E) It is a price-weighted average of 30 large industrial stocks, and the divisor must be adjusted for stock splits.

Question

Quizplus · Accepted Answer

The Dow Jones Industrial Average (DJIA) is indeed a price-weighted average of 30 significant stocks traded on the New York Stock Exchange (NYSE) and the NASDAQ. The divisor, known as the Dow Divisor, is adjusted to account for stock splits, dividends, or structural changes to maintain the index's continuity.

Which of the Following Is True of the Dow Jones