# Question: The most widely reported index of the performance of the

The most widely reported index of the performance of the New York Stock Exchange (NYSE) is the Dow Jones Industrial Average (DJIA). This index is computed from the stock prices of 30 companies. When the DJIA was invented in 1896, the index was the average price of 12 stocks. The index was modified over the years as new companies were added and dropped from the index and was also altered to reflect when a company splits its stock. The closing New York Stock Exchange (NYSE) prices for the 30 components (as of June 19, 2014) of the DJIA are given in the following table.
a. Compute the average price of the 30 stock prices in the DJIA.
b. The DJIA is no longer an average; the name includes the word “average” only for historical reasons. The index is computed by summing the stock prices and dividing by a constant, which is changed when stocks are added or removed from the index and when stocks split.
where yi is the closing price for stock i and C = 0.155625. Using the stock prices given, compute the DJIA for June 19, 2014.
c. The DJIA is a summary of data. Does the DJIA provide information about a popula­tion using sampled data? If so, to what population? Is the sample a random sample?

Sales0
Views35