How Do You Calculate A Stock Price Index?
A stock price index is a good way to measure any subsection of the stock market, from a particular industry to market size. Common indexes are the Wilshire 5000 or the S&P 500. The most popular and quoted index is the Dow Jones Industrial Average (DJIA), which is a price-weighted index of 30 blue chip stocks. Gather the stock price information for five listed stocks of your choice going back 20 days or one month. You can find this information on Yahoo! Finance by entering a ticker symbol in “Get Quotes” and clicking on “Historical Prices” in the left-hand pane. You will also need the number of shares outstanding. Choose a starting point or base period for your stock. It can be the first day of the range selected in Step 1. Create three columns in a spreadsheet or on paper. Make one column for the date (Column A), one for the stock (Column B) and one for the price of the stock (Column C). Sum Column C (the price of the stock) and divide by five (the number of stocks in your index). This
