Economics
Stock Market Index Construction and Interpretation
Quick fact
The Dow Jones Industrial Average was created in 1896 by Charles Dow as an average of 12 industrial stocks. Its current divisor is less than 0.152, not the number of stocks, due to historical adjustments.
Why this is interesting
Every evening, news anchors announce the Dow closed up or down, but did you know that the Dow used to be calculated by simply adding up stock prices and dividing? What happens to its accuracy when a stock splits?