Dow, and it first appeared on May 26, 1896. Dow took eleven stocks, summedtheir prices on a particular day, and then divided by eleven. This average pricewas the DJIA. At the time that Dow originally computed the DJIA, the stockmarket was not highly regarded in the U.S. Investors were more interested inbonds than stocks, and many thought that those in charge on Wall Streetmanipulated stock prices to their advantage. Dow created the DJIA to conveysome information about what was happening in the stock market, and chose theoriginal stocks because he thought that they would mirror what was happening inthe stock market as a whole. The DJIA is currently computed by summing theprices of the thirty stocks and dividing by a special divisor (which is used to avoiddistortions that can occur, such as stock splits).
POINTS:1DIFFICULTY:ChallengingNATIONAL STANDARDS:United States - BUSPROG: AnalyticLOCAL STANDARDS:United States - OH - Default City - DISC: Markets, market failure, a - DISC:Markets, market failure, and externalitiesKEYWORDS:Bloom's: Application110. Describe the three main options available to a corporation when it needs to raise money so that it can invest in a newproduct or a new manufacturing technique.
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POINTS:1DIFFICULTY:EasyNATIONAL STANDARDS:United States - BUSPROG: AnalyticLOCAL STANDARDS:United States - OH - Default City - DISC: Markets, market failure, a - DISC:Markets, market failure, and externalitiesKEYWORDS:Bloom's: Application
