Price-weighted index

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Price-weighted index

An index giving a greater influence to higher-valued stocks by weighting all component stocks by their price.

Price-Weighted Index

An index that tracks a number of securities in which price changes in stocks that already have higher prices affect the index's price changes more than other securities. For example, suppose an index tracks three stocks: A, B, and C. If A has a higher price than B and C, an uptick in A will be more likely to result in an uptick in the index as a whole (depending on how much more weighted it is). Price weighted indices are less common than capitalization-weighted indices, but the Dow Jones Industrial Average is a prominent example.
References in periodicals archive ?
Question still remains whether the KSE-100 Index is a proper representation of stock prices or not A few analysts believe that at current levels the KSE-100 Index does not represents the price levels correctly as stock prices are far off from their respective CY14TD highs mainly due to the fact that the KSE-100 Index is not a price weighted index.
For the example data on farm grain price weighted index, we multiply the price relatives in the last column of table 13.