Re: [EquisMetaStock Group] How to Construction an Index ?

["Dusant" <dusant@xxxxxxxxxxxxxxxxxx>]

Hi Tan,
Constructing an index is a highly developed 
mathematical science, which takes the market capitalisation of its components 
and keep adjusting it for splits, rights, bonus issues and dividend 
payouts.
That is why the construction of the index is left 
to specialised companies or stock exchanges.
You can read more on this here.
 
<A 
href="">http://indexes.dowjones.com/jsp/index.jsp
 
Each index has its component stocks. Everyday, 
according to the market capitalisation of the individual stock, the weightage of 
the stock is "contributed" to the index and the index is 
recalculated.
 
If there is a dividend payout or stock split, the 
"contribution" is accordingly added to the index. That is because the historical 
value of the index cannot be changed. Therefore, the stock's weighted 
contribution is changed to reflect the new scenario.
 
DusantChief Architect<A 
href="">http://www.candlestrength.com/
<BLOCKQUOTE 
>
  ----- Original Message ----- 
  <DIV 
  >From: 
  tan 
  kok hong 
  To: <A 
  title=equismetastock@xxxxxxxxxxxxxxx 
  href="">equismetastock@xxxxxxxxxxxxxxx 
  
  Sent: Wednesday, March 17, 2004 3:06 
  PM
  Subject: [EquisMetaStock Group] How to 
  Construction an Index ?
  Hello ! can some one tell me 
  how to construct an DowJones Index ? we know that Dow Jones Index 
  isconstructed by 30 main counters ... but how tocalculate it 
  ?thanks !







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