Nikkei-Dow Jones Average

Nikkei-Dow Jones Average - 5-1Nikkei-Dow Jones...

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Unformatted text preview: 5-1Nikkei-Dow Jones Average•Arithmetic average of prices for 225 stocks on the First Section of the Tokyo Stock Exchange (TSE)•Best-known series in Japan•Price-weighted series formulated by Dow Jones and Company•The 225 stocks represent 15 percent of all stocks on the First Section5-2Value-Weighted Index•Derive the initial total market value of all stocks used in the series–Market Value = Number of Shares Outstanding X Current Market Price•Assign an beginning index value (100) and new market values are compared to the base index•Automatic adjustment for splits•Weighting depends on market value5-3Exhibit 5.45-4Value-Weighted Indexwhere:Index t= index value on day tPt= ending prices for stocks on day tQt= number of outstanding shares on daytPh = ending price for stocks on base dayQh = number of outstanding shares on base dayValueIndex BeginningIndext×=∑∑hhQPQPtt5-5Unweighted Index•All stocks carry equal weight regardless of price or market value•May be used by individuals who...
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Nikkei-Dow Jones Average - 5-1Nikkei-Dow Jones...

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