What is the Dow Jones Industrial Average?
A: The Dow Jones Industrial Average is a stock market index of 30 prominent companies listed on stock exchanges in the United States.
Although the DJIA is one of the oldest and most
commonly followed equity indices, many professionals consider it to be what?
A: An inadequate representation of the overall U.S. stock market compared to a broader market index such as the S&P 500.
The DJIA includes how many large companies?
It is price-weighted, unlike stock indices which use
A: Market capitalization.
Furthermore, the DJIA does not use a what?
A: A weighted arithmetic mean.
The value of the index can also be calculated as the
sum of the stock prices of the companies included in the index, divided by
A: A factor which is currently (as of November 2021) approximately 0.152.
When is the factor changed?
A: Whenever a constituent company undergoes a stock split so that the value of the index is unaffected by the stock split.
First calculated on May 26, 1896, the index is the
second-oldest among U.S. market indices, after what?
A: The Dow Jones Transportation Average.
Who created it?
A: Charles Dow, the editor of The Wall Street Journal and the co-founder of Dow Jones & Company, and named after him and his business associate, statistician Edward Jones.
The word industrial in the name of the index initially
A: The heavy industry sector, but over time stocks from many other types of companies have been added to the DJIA.
The index is maintained by S&P Dow Jones Indices, an
entity majority-owned by whom?
A: S&P Global.
Its components are selected by whom?
A: A committee.
The ten components with the largest dividend yields are
commonly referred to as what?
A: The Dogs of the Dow.
As of August 31, 2020, the components of the DJIA have
changed how many times since its beginning on May 26, 1896?
What company had the longest continuous presence on the
index, beginning in the original index in 1896 and ending in
A: General Electric.
In 1884, Charles Dow composed his first stock average,
which contained what?
A: Nine railroads and two industrial companies that appeared in the Customer's Afternoon Letter, a daily two-page financial news bulletin which was the precursor to The Wall Street Journal.
Dow calculated his first what?
A: Average purely of industrial stocks on May 26, 1896, creating what is now known as the Dow Jones Industrial Average.
When it was first published in the mid-1880s, the index
stood at what level?
It reached a peak of 78.38 during the summer of 1890
but ended up hitting its all-time low of 28.48 in the summer of 1896 during
A: The Panic of 1896.
In the 1900s, the Dow halted its momentum as it worked
its way through what?
A: Two financial crises: the Panic of 1901 and the Panic of 1907.
The Dow remained stuck in a range between 53 and 103
A: Late 1914.
The index broke 100 for the first time in what year?