Economics · Stock Market Indices

How is the Dow Jones Industrial Average (DJIA) calculated to account for corporate actions like stock splits and dividends?

Verified Solution4 OptionsUpdated: October 2026👁️1 View

1By tracking the median percentage price change of the constituent stocks over a rolling 30-day period
2By summing the prices of the 30 stocks and dividing by a dynamically adjusted mathematical divisor✓
3By weighting the stock prices according to the total market capitalization of each company
4By calculating the simple geometric mean of the 30 constituent stock prices

Correct answer

By summing the prices of the 30 stocks and dividing by a dynamically adjusted mathematical divisor

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