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 index is a 15-stock, price-weighted index that measures the performance of some of the largest US companies within the utilities sector.
"Kuwait was the best performing market in the GCC in 2017, with a price-weighted index return of 16.9 per cent.
The Nikkei 225, a price-weighted index containing the top 225 blue-chip companies trading on the Tokyo Stock Exchange, just reached a 21-year high.
The iPhone and iPad maker had been notable by its absence in the 30-stock average, and it had been excluded because its stock price was too high for the price-weighted index. The move by S&P Dow Jones Indices had been widely anticipated since a seven-for-one stock split in June 2014.
The iPhone and iPad maker had been notable by its absence in the Dow industrials, and the technology giant had been excluded because its stock price was too high for the price-weighted index. However, the inclusion of Apple in the world's most closely watched stock index had been widely anticipated since a seven-for-one stock split last June.
The Dow is a price-weighted index. Most other indexes account for a company's overall market value, which is found by multiplying the number of shares outstanding by the stock price.
According to market analysts, higher-priced stocks have bigger impact on Dow Jones since it is a price-weighted index. Before the stock split, Apple's stock had an above $600 price, but the stock split has made it eligible for Dow Jones.
The price-weighted index rose 5.15 percent based on price appreciation and had a total return of 5.56 percent as 11 of the 29 companies posted positive returns for the three-month period ending Dec.
In a price-weighted index, caviar will have the biggest overall impact because it's the most expensive item you've bought, even though you spent far more money on tuna.

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