Apples and Oranges: Building a Better Dow
9 Pages Posted: 12 Aug 2012 Last revised: 14 Aug 2012
Date Written: August 10, 2012
We propose a modification to the Dow formula that largely preserves the historical integrity of the time series but allows for the inclusion of securities regardless of their market price and a smooth and gradual transition, as incumbent stocks are replaced, to a fully value-weighted index in the long run.
Keywords: Dow Jones Industrial Average, Price-Weighted Index, Value-Weighted Index
JEL Classification: G0
Suggested Citation: Suggested Citation