Posted in Finance, Accounting and Economics Terms, Total Reads: 326
Definition: Price-Weighted Index
Price-weighted index is an index in which each stock affects the index in relation to its price/share. The index value is calculated by summing the prices of each stock in the index and dividing them by the total number of stocks outstanding. Stocks with a greater price will be given greater weight and, therefore, will have a more influence on the performance of the index.