If the Dow Jones Industrial Average increases from 8,500 to 10,000 in a year, an investor who owns 30 shares of the 30 companies in the Dow has earned what total annual return on their stock portfolio?
A) 1.17%
B) 17.6%
C) 85%
D) The correct answer cannot be calculated from this price-weighted average.

Question

Quizplus · Accepted Answer

The Dow Jones Industrial Average is a price-weighted index, meaning the increase in the index does not directly translate to the percentage gain or loss for an investor owning shares in the companies. The actual return would depend on the specific performance of each stock in the portfolio, not just the overall movement of the index.

If the Dow Jones Industrial Average Increases from 8,500 to 10,000