Suppose that Pfizer and Boeing are part of the Dow-Jones Industrial Average. If on a given day Boeing closes at $320 and Pfizer at $40

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The Dow Jones Industrial Average (DJIA) is a price-weighted index, meaning that companies with higher stock prices have a greater impact on the index's performance. Therefore, a change in Boeing's stock price will have a more significant effect on the DJIA than an equivalent dollar change in Pfizer's stock price, precisely because Boeing's stock price is higher. In this case, since Boeing's stock price is 8 times that of Pfizer's ($320 vs. $40), a change in Boeing's stock price will indeed have 8 times the effect on the Average compared to an equivalent dollar change in Pfizer's stock price.

Suppose That Pfizer and Boeing Are Part of the Dow-Jones