Question

Assume that on a particular day, the DJIA opened at 11,739.19. The divisor at that time...

Assume that on a particular day, the DJIA opened at 11,739.19. The divisor at that time was .132316791. What would the new index level be if all 30 stocks on the DJIA increased by $1.00 per share on the next day?

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Answer #1

Solution

Index value = 11739.19

Divisor = .132316791

Sum of all 30 stocks= index value * divisor

Sum of all 30 stocks = 11739.19*.132316791= 1553.291949739

Stock increase by $1 it means new sum of all 30 stocks will be = 1553.291949739+30= 1583.291949739

New divisor will be same as of old divisor

New Sum of 30 stocks = 1583.291949739

New index level = new sum of 30 stocks / new divisor

New index level = 1583.291949739/.132316791= 11965.92

New index level = 11965.92

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