Question

what would happen to the divisor of Dow Jones Industrial Average if FedEx, with a current...

what would happen to the divisor of Dow Jones Industrial Average if FedEx, with a current price of around $210 per share, replaced Intel with a current value of about $40 per share?

Homework Answers

Answer #1

Current price of FedEx=210

Current price of Intel =40

Dow Jones Industrial average is calculated by adding up all the stock prices of its 30 components and dividing the sum by the divisor.

Divisor for 2020 is 0.152 i.e for every $1 change is value the DJIA will have a movement of 6.57 (1/0.152=6.57points)

When lower value share is replaced by higher value share , then the Dow Jones Industrial average will have upward movement.

= (210-40)/0.152

=1118.42points upward movement

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
The price-weighted Dow Jones Industrial Average Index closed at 12,500 today and the divisor was 0.14....
The price-weighted Dow Jones Industrial Average Index closed at 12,500 today and the divisor was 0.14. One of the 30 constituent stocks had a 5-for-1 stock split right declining from $100 to $20 per share right after the market close (immediately after the index value and divisor above were observed). What would the new divisor have to be to keep the index value unchanged at 12,500?     Group of answer choices 1) 0.1320 2) 0.1424 3) 0.1416 4) 0.1336
WBA stock price is $114 and DOW stock price is $50.00. The Dow Jones divisor is...
WBA stock price is $114 and DOW stock price is $50.00. The Dow Jones divisor is 0.147. How would the divisor change value if AMZN ($3200.00/Share) were to replace DOW and GOOG ($114.00/Share) was to replace WBA?
The average (EPS) for 10 industrial stocks randomly selected from those listed on the Dow-Jones Industrial...
The average (EPS) for 10 industrial stocks randomly selected from those listed on the Dow-Jones Industrial Average was found to be 10.01 with a standard deviation of 3.89. What is the 99% Error Bound (EBM)?
Which of the following statements can be correctly made about the dow jones industrial average (djia)...
Which of the following statements can be correctly made about the dow jones industrial average (djia) The djia consists of stocks that constitute more than 50% of all publicly traded stocks The djia is an excellent broad based measure of the general stock market
As of today, what is the value of the Dow Jones Industrials (DJIA Mini) September 2020...
As of today, what is the value of the Dow Jones Industrials (DJIA Mini) September 2020 futures? How many of these futures contracts can you buy with one million USD? Assume the value of the futures at maturity is 27,000, what would happen if you keep the contracts until maturity? How much would be your gain/loss in dollars?
8. As of today, what is the value of the Dow Jones Industrials (DJIA Mini) September...
8. As of today, what is the value of the Dow Jones Industrials (DJIA Mini) September 2020 futures? How many of these futures contracts can you buy with one million USD? Assume the value of the futures at maturity is 27,000, what would happen if you keep the contracts until maturity? How much would be your gain/loss in dollars?
8. As of today, what is the value of the Dow Jones Industrials (DJIA Mini) September...
8. As of today, what is the value of the Dow Jones Industrials (DJIA Mini) September 2020 futures? How many of these futures contracts can you buy with one million USD? Assume the value of the futures at maturity is 27,000, what would happen if you keep the contracts until maturity? How much would be your gain/loss in dollars?
The S&P 500 and the Dow Jones Industrial Average indices are proxies for the broader US...
The S&P 500 and the Dow Jones Industrial Average indices are proxies for the broader US stock market. You notice one day that the S&P 500 closed UP by 0.20%, while the DJIA closed DOWN by 0.20%. Explain how it is possible for one proxy (S&P 500) to have a positive return while the other (DJIA) has a negative return on any given day. Include in your explanation some names that could have caused this discrepancy. Which return (S&P 500...
Many investors and financial analysts believe the Dow Jones Industrial Average (DJIA) gives a good barometer...
Many investors and financial analysts believe the Dow Jones Industrial Average (DJIA) gives a good barometer of the overall stock market. On January 31, 2006, 9 of the 30 stocks making up the DJIA increased in price (The Wall Street Journal, February 1, 2006). On the basis of this fact, a financial analyst claims we can assume that 30% of the stocks traded on the New York Stock Exchange (NYSE) went up the same day. A sample of 65 stocks...
Many investors and financial analysts believe the Dow Jones Industrial Average (DJIA) gives a good barometer...
Many investors and financial analysts believe the Dow Jones Industrial Average (DJIA) gives a good barometer of the overall stock market. On January 31, 2006, 9 of the 30 stocks making up the DJIA increased in price (The Wall Street Journal, February 1, 2006). On the basis of this fact, a financial analyst claims we can assume that 30% of the stocks traded on the New York Stock Exchange (NYSE) went up the same day. A sample of 72 stocks...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT