What is the price -valuable index?

Index Dear price is the type of stock market index used to assess the value of the stock group. In the Dear Price Index, each stock has a weight or influence on the basis of its excellent stock price. The higher the stock shares, the greater the weight is given. In the price index, the total value of the group is influenced by shares with the largest sharing values ​​and less those who have lower values. This type of index is used in several well -known stock market indices, including the Dow Jones industrial average and the Dow Jones diameter in the United States. No matter how big the company is or how many shares it has, the value of sharing is the king. Let's say, for example, that a company A has 5,000 $ 80 shares in the US (USD) and B has 100,000 shares worth $ 20. Although the company B costs more on the basis of its overall market value T because of the fact that it has many more shares, the Company A would be weighed higher in the Index Dear Price, because its individual stock price is higher.

As a result of this weight, the change in the value of the stock is differently different for different shares. In the above example, the company's shares would have four times the impact on the total average, because its stock price is a four -time B -price. Market value is the number of shares multiplied by the price of shares. In the Dear Market Index, company B would have a greater influence than Society A because it has more total market value.

The market index can often help investors see the overall direction it supplies in and the country or business. For example, the Dow Jones industrial average is a price -weighted index of the 30 largest companies in the United States. It is often consulted on how the total US stock market works day by day or year by year. Diameter Dow Jones that SKIt lashes from 15 large business companies in the US, can help provide a more focused view of how US public service services generally appear.