Dow Jones Industrial Average Flashcards, test questions and answers

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What is Dow Jones Industrial Average?

The Dow Jones Industrial Average, often simply referred to as the Dow, is a stock market index that measures the stock performance of 30 large companies listed on the New York Stock Exchange and the Nasdaq. The index is owned by S Dow Jones Indices, a joint venture between S Global and CME Group. It was founded in 1884 by Charles Dow and Edward Jones. The purpose of the index is to give investors an idea of how their portfolios are performing relative to other large companies on Wall Street.The companies included in the Dow make up a wide variety of industries, including financials, consumer goods, healthcare, technology and more. The stocks are weighted based on their prices at current market values. This means that stocks with higher prices have greater influence over the average than those with lower prices. This also helps to ensure that no single company has too much influence over the direction of the index as a whole. In addition to its stock performance metrics, the Dow also serves as an indicator for broader economic trends due to its representation of so many different sectors within U.S. markets The value of each stock within the Dow can change daily depending on investor sentiment and other factors such as economic news or corporate events like earnings reports or mergers and acquisitions announcements. As such, it’s not uncommon for individual stocks within it to experience significant fluctuations throughout any given day or week while still maintaining relatively steady growth over time when viewed on a longer-term timeframe due largely in part to their diversification across sectors and industries which reduces overall risk exposure for investors who own them collectively through mutual funds or exchange traded funds (ETFs). Overall, tracking changes in value for both individual stocks within this index will help investors stay informed about overall trends affecting U.S equity markets while still allowing them some freedom from volatility resulting from news events or single-company developments making it one of most popular ways for investors around world gauge their portfolios’ performance compared against largest companies trading publically traded exchanges today.