4 5 6 7 8 a 9 Purpose of the homework: 1. Students will learn the composition of Dow Jones Industrial Average (DJIA ) 2. Students can learn how this blue-chip stock index is calculated. Assignment: This is an easy warm-up exercise. From the Market Lineup of the Wall Street Journal (Page C2), you can find the Dow 30 components. When you add up the net point change of the day and divide the sum by the Divisor (0.12493117 as of 10/3/2006), you should get the change in the DJIA for that day. Please make sure that you use the current divisor in the calculation. The assignment asks you to obtain the closing prices for two consecutive days for each stock in the Dow 30. You then calculate the DJIA for each day by adding up the prices of all 30 components and dividing the sum by the Divisor. Next, you calculate the price change for each stock and add up the price changes and divide the sum by the Divisor. The result should be the change in the DJIA for these two days. You also need to collect the actual closing DJIA for these two days and compare with the result of your calculation. You should choose any two consecutive days. You are advised to use the sample spreadsheet for this assignment. Information Source: You can obtain the components and historical indices of the Dow (DJIA) from the Yahoo Finance website. To get the prices of the Dow components, you should go to the summary page of the Dow (DJIA). You can find the " Components" on the left menu. Once you are on the component page, you can download the prices of all components to a spreadsheet by clicking on the "Download" button. Remember to do it after the end of market so you can get the closing prices. 10 11 12 13 14 15 16 17 18 19 20 20 21 41 22 23 24 25 26 27 28 28 29 Ticker Symbol" AA AIG AXP BA BAC C с CAT CVX DD DIS GE 32¢18²[20]][[2-55]] 30 31 32 33 34 Sum 35 Divisor (2/19/08)** 36 Calculated DJIA 37 Actual DJIA Company Name Alcoa Inc. American Intemational Group American Express Company Boeing Co Bank of America Corporation. Citibank Inc Caterpillar Inc Chevron Corp. Du Pont Walt Disney Co. General Electric Co General Motors Corporation The Home Depot, Inc. Hewlett Packard Co International Intel Corporation Johnson & Johnson JPMorgan & Chase Co Coca-Cola Co McDonald's Corp. 3M Co Business Machines Corp. Merck & Company Inc. Microsoft Corporation Pfizer Inc Procter & Gamble Co AT & T Inc United Technology Corporation Verizon Communication Inc. Walmart Stores Inc Exxon Mobil Corporation 0.122834016 March 5 38.71 44.61 42.23 80.71 37.55 22.15 71.85 88.79 47.3 31.64 33.67 22.97 26.76 48.31 115.39 20.2 63.13 38.7414 59.68 53.94 78.93 43.25 28.12 22.05 66.7 35.45 69.73 35.95 49.55 87.19 1505.25 12254.35 12254.99 March 6 38.37 42.88 41.29 79.51 36.52 21.17 70.75 87.8 46.47 31.25 32.86 22.35 25.76 47.78 112.52 19.87 62.63 37.37 59.1 53.04 77.95 42.39 27.57 21.59 66.51 35.02 68.83 35.28 49.98 84.51 1478.92 12039.99 12040.39 Change in Stock Price/Index (0.34) (1.73) (0.94) (1.20) (1.03) (0.98) (1.10) (0.99) (0.83) (0.39) (0.81) (0.62) (1.00) (0.53) (2.87) (0.33) (0.50) (1.37) (0.58) (0.90) (0.98) (0.86) (0.55) (0.46) (0.19) (0.43) (0.90) (0.67) 0.43 (2.68) (26.33) (214.37) (214.60) 38 39 *The composition of the 30 stocks may change over time. This spreadsheet is presented only for reference and may not contain the most recent composition. 40 **The divisor may change over time for several reasons. Please use the current divisor. 41