Q1. Companies comprising the Dow Jones Industrial Average (DJIA). The DJIA is the most quoted stock market index. On October 1, 1928 the first DJIA was computed using (10 / 20 / _________) industrial stocks traded on the New York Stock Exchange. Since then the corporations comprising the index have changed many times to reflect the changing economy. What stocks currently comprise the DJIA? Use the Internet to find out and list 6 of the 30 companies that currently comprise the DJIA.
Q2. Computing the DJIA. The index started as a true average of the market values of the stocks comprising the index. In 1928, the sum of the market values of the each of the 30 stocks totaled $6,000 / 30 stocks = 200 DJIA points. However, the average computation needed to be adjusted for stock splits and stock dividends. On May 31, 2012 the market values added together totaled $1,637.54 divided by a divisor of 0.132129493 = DJIA of 12,393 points.
On May 31, 2012 if each of the 30 DJIA stocks increased in value by one dollar per share then the DJIA would increase by approximately 227 points (30/0. 132129493 = 227). On May 31, 2012 assume the DJIA increased by approximately 450 points. This means that on average, each DJIA company would have increased in value by _________ per share. When the DJIA increases in value, then the majority of stocks traded on the New York Stock Exchange would also be expected to (_________ / decrease) in value.
Q3. Historical Summary of the DJIA. The following chart summarizes the DJIA at various points in history. Using the information presented in the chart, complete the graph outlined below.
Date DJIA
1928......... 200
1981......... 1,000
1986......... 2,000
1991......... 3,000
1995......... 4,000
1996......... 6,000
1997......... 8,000
1999.........11,000
2002......... 7,000
2004.........10,000
2007 Oct 9.......14,164
2008......... 8,000
2009 March 9....... 6,547
2011.........12,000
Q4. Use the Internet to find the current DJIA. DJIA closed at _________ points on _________ (date).
Q5. Over the years the DJIA has had its ups and downs, but since 1928 the general direction of the DJIA has been (_________ / decreasing).
a. Since 1928, the stock market has offered investors an opportunity to make significant financial gains through the appreciation of stock market values, especially from 1981 to 2007.
b. Since 1928, the ability of corporations to finance assets with shareholder contributions has increased, especially from 1981 to 2007.