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 ?
The Dow Jones industrial average, a price-weighted index, tracks the share prices of 30 large U.
The price-weighted index tracks the stock performance of 50 of the largest publicly traded companies headquartered in the San Fernando, Conejo, Simi, Santa Clarita and Antelope valleys.
The Dow is a price-weighted average of blue chip stocks of companies that have a long record of profit growth and dividend payment.

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