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Comments

Rj Kuehl

Please review your analysis regarding why GOOG was not added to the Dow. When a stock is added to the index it retains the same weighting as the stock it replaces. From that point forward individual price changes change its weighting.

Paul Hickey

The Dow is a price weighted index, and is calculated by adding up the prices of all the individual stocks in the index and dividing by the set divisor, which is adjusted every time a stock splits has a spinoff or is replaced. A stock's weighting in the index is calculated by dividing the price of an individual stock into the sum of the prices of the thirty stocks in the index.

When a new stock is added to the index, it does not assume the weight of the the stock it replaced, the weights of every stock in the index are adjusted accordingly.

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