| Dictionary, Encyclopedia and Thesaurus - The Free Dictionary 3,899,385,768 visitors served. |
Dictionary/ thesaurus | Medical dictionary | Legal dictionary | Financial dictionary | Acronyms | Idioms | Encyclopedia | Wikipedia encyclopedia | ? |
Divisor |
Also found in: Dictionary/thesaurus, Legal, Encyclopedia, Wikipedia | 0.01 sec. |
|
|
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. Want to thank TFD for its existence? Tell a friend about us, add a link to this page, add the site to iGoogle, or visit the webmaster's page for free fun content. |
|
| Financial Dictionary |
| Free Tools: |
For surfers:
Free toolbar & extensions |
Word of the Day |
Help
For webmasters: Free content | Linking | Lookup box | Double-click lookup |
|---|