Since it is price-weighted, the index is calculated using a divisor to normalize the index components. The Dow Jones and the ...

The Dow is a price-weighted index, which means that each component ... the prices of its 30 stocks and divide the sum by the Dow Divisor, a numeral that factors in stock splits and stock dividends.

Stock indexes are collections of stocks meant to represent the market or a portion of it—they are used by investors as benchmarks against which to compare the performance of their own portfolios.

But what is the Dow Jones? To be exact, the Dow Jones, which is also known as the Dow or the DJIA, is a price-weighted index of 30 blue chip stocks on the New York Stock Exchange (NYSE ...