A price-weighted index is a stock market index where each constituent makes up a fraction of the index that is proportional to its component, the value would be:

A stock trading at $100 will thus be making up 10 times more of the total index compared to a stock trading at $10.

The Dow Jones Industrial Average and Nikkei 225 are examples of price-weighted stock market indexes.


This article uses material from the Wikipedia article Price-weighted index, which is released under the Creative Commons Attribution-Share-Alike License 3.0.