Question

talk about the following stock market indices

a) Dow Jones industrial average

b) Nasdaq Composite

c) CAC 40

Answer 1

1. The Dow Jones Industrial Average (DJIA), Dow Jones, or simply the Dow , is a stock market index that measures the stock performance of 30 large companies listed on stock exchanges in the United States. Although it is one of the most commonly followed equity indices, many consider the Dow to be an inadequate representation of the overall U.S. stock market compared to broader market indices such as the S&P 500 Index or Russell 3000 because it only includes 30 large cap companies, is not weighted by market capitalization, and does not use a weighted arithmetic mean.

The value of the index is the sum of the price of one share of stock for each component company divided by a factor which changes whenever one of the component stocks has a stock split or stock dividend, so as to generate a consistent value for the index. Since the divisor is currently around 0.1458, the value of the index is 6.859 times larger than the sum of the component prices.

It is the second-oldest U.S. market index after the Dow Jones Transportation Average, created by The Wall Street Journal editor and Dow Jones & Company co-founder Charles Dow. It is the best known of the Dow Averages, of which the first (non-industrial) was originally published on February 16, 1885. The averages are named after Dow and one of his business associates, statistician Edward Jones. The industrial average was first calculated on May 26, 1896.

The Industrial portion of the name is largely historical, as many of the modern 30 components have little or nothing to do with traditional heavy industry. The index is maintained by S&P Dow Jones Indices, a joint venture majority-owned by S&P Global and its components are selected by a committee. The ten components of the index with the highest dividend yields are referred to as the Dogs of the Dow. Although the Dow is compiled to gauge the performance of the industrial sector within the American economy, the index's performance continues to be influenced by not only corporate and economic reports, but also by domestic and foreign political events such as war and terrorism, as well as by natural disasters that could potentially lead to economic harm.

2.

The NASDAQ is a stock market index of the common stocks and similar securities (e.g. ADRs, tracking stocks, limited partnership interests) listed on the Nasdaq stock market. Along with the Dow Jones Industrial Average and S&P 500 it is one of the three most-followed indices in US stock markets. The composition of the NASDAQ Composite is heavily weighted towards information technology companies. The NASDAQ-100, whose components are a subset of the NASDAQ Composite's, accounts for over 90% of the NASDAQ Composite's movement, and there are many ETFs tracking its performance. The composite itself is calculated by taking the sum of the products of closing price and index share(capitalization-weighted) of all of the over 2500 securities in the index. The sum is then divided by a divisor which just serves to reduce the order of magnitude of the result.

The index was launched in 1971, with a starting value of 100. Over the years, the index has soared tremendously despite multiple periods of decline.

3.

The CAC 40  is a benchmark French stock market index. The index represents a capitalization-weighted measure of the 40 most significant stocks among the 100 largest market caps on the Euronext Paris (formerly the Paris Bourse). It is one of the main national indices of the pan-European stock exchange group Euronext alongside Brussels' BEL20, Lisbon's PSI-20 and Amsterdam's AEX.

The CAC 40 takes its name from the Paris Bourse's early automation system. Its base value of 1,000 was set on 31 December 1987, equivalent to a market capitalisation of 370,437,433,957.70 French francs.In common with many major world stock markets, its all-time high to date (6922.33 points) was reached at the peak of the dot-com bubble in September 2000. On 1 December 2003, the index's weighting system switched from being dependent on total market capitalisation to free float market cap only, in line with other leading indices.