Divisor

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Divisor

Used in construction of stock indices. Suppose there 10 stocks in an index, each worth $10 and the index is at 100. Now suppose that one of the stocks must be replaced with another stock that is worth $20. If no adjustment is made to the divisor, the total value of the index would be110 after the swapping. yet there should be no increase in value because nothing has happened other than switching the two constituents. The solution is to change the divisor; in this case from 1.00 to 1.10. Note that the value of the index, 110/1.1, is now exactly 100 - which is where it was prior to the swap.

Divisor

In division, the number by which another number if divided. For example, in the equation 8 / 4 = 2, the divisor is 4. This is used in indexes to account for stock splits and dividends. See also: Dow divisor.
References in classic literature ?
Cover up a pound of earth never so cunningly, divide and subdivide it; melt it to liquid, convert it to gas; it will always weigh a pound; it will always attract and resist other matter by the full virtue of one pound weight:--and the attributes of a person, his wit and his moral energy, will exercise, under any law or extinguishing tyranny, their proper force,--if not overtly, then covertly; if not for the law, then against it; if not wholesomely, then poisonously; with right, or by might.
At first it may be; but, long since with woe Nearer acquainted, now I feel by proof That fellowship in pain divides not smart, Nor lightens aught each man's peculiar load; Small consolation, then, were Man adjoined.
He crossed no more hills or divides, but automatically followed a large stream which flowed through a wide and shallow valley.
What you have told me, Blanche, divides itself, in my mind, into two heads," began Sir Patrick.
Cornelia divides all the folks in the world into two kinds-- the race that knows Joseph and the race that don't.
As it does not appear probable that the tubes are produced by successive distinct shocks, we must believe that the lightning, shortly before entering the ground, divides itself into separate branches.
Regarding the Sperm whale's head as a solid oblong, you may, on an inclined plane, sideways divide it into two quoins, whereof the lower is the bony structure, forming the cranium and jaws, and the upper an unctuous mass wholly free from bones; its broad forward end forming the expanded vertical apparent forehead of the whale.
Elinor was grateful for the attention, but it could not alter her design; and their mother's concurrence being readily gained, every thing relative to their return was arranged as far as it could be;-- and Marianne found some relief in drawing up a statement of the hours that were yet to divide her from Barton.
Divide et impera[1] must be the motto of every nation that either hates or fears us.
How liable would she become not only to their contempt but to their outrage, and how soon would dear-bought experience proclaim that when a people or family so divide, it never fails to be against themselves.
We see it particularly displayed in all the subordinate distributions of power, where the constant aim is to divide and arrange the several offices in such a manner as that each may be a check on the other -- that the private interest of every individual may be a sentinel over the public rights.
Whether to concentrate or to divide your troops, must be decided by circumstances.