Dow Jones Industrial Average

High school (ages 12+)
Mathematics & Numbers

Name:

Date:

Step 1 · Read the article

Open the article and read it at the level above. Then answer the questions below in your own words.

https://smallwhale.org/articles/dow-jones-industrial-average

Write what each word means, using the article.

Do not copy the article. Write two things you learned, the way you would explain them to a friend.

Answers below are taken from the article’s stored facts, so they match what the student read.

1. What is the index methodology?Price-weighted index, meaning stocks with higher per-share prices have a greater influence
2. What is the date of first calculation?May 26, 1896
3. How does the Dow decide which companies to include?A committee from S&P Dow Jones Indices and The Wall Street Journal picks companies that represent major U.S. industries. They change the list when needed.
4. Why does the Dow use price-weighting instead of market value?In the Dow, a stock with a higher price has more influence, no matter how big the company is. This gives a special view of high‑priced stocks.

Price-Weighted Index: An index where the weight of each component is determined by its stock price, not its market capitalization.
Market Capitalization: The total value of a company's outstanding shares, calculated by multiplying share price by the number of shares.
Stock Split: An action by a company to increase the number of its outstanding shares by dividing each existing share into multiple new shares.
Divisor: A number used in index calculations to adjust for stock splits and component changes, ensuring continuity.