Which of the following statements regarding the Dow Jones Industrial Average (DJIA) is false?
A) The DJIA is a measure of the performance of the stock market.
B) The DJIA consists of 30 blue chip stocks.
C) The DJIA is affected equally by changes in low- and high-priced stocks.
D) The DJIA divisor needs to be adjusted for stock splits.
E) The value of the DJIA is much higher than individual stock prices.

Question

Quizplus · Accepted Answer

The DJIA is a price-weighted index, meaning that it is more affected by changes in the prices of high-priced stocks than by changes in the prices of low-priced stocks. This makes statement C false.

Which of the Following Statements Regarding the Dow Jones Industrial