From the course: Understanding Capital Markets

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Stock market indices

Stock market indices

From the course: Understanding Capital Markets

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Stock market indices

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- [Instructor] If you're going to invest, you need to be familiar with the different stock market indices ranging from the Dow to the Russell 2000, how they're calculated and what they represent to the market overall. So I'm here on cnbc.com, and this screen just shows us a couple of important stock indices. In particular, the Dow Jones Industrial Average, which represents 30 large-cap companies that are representative of the US economy as a whole, and the NASDAQ-100, which represents an index tracking the NASDAQ, that tech heavy stock exchange. Now, as we can see, if we scroll through the Dow 30 list, there's a number of names on here you might be familiar with: American Express, Apple, Boeing, Cisco, Exxon, Home Depot, et cetera. These are large companies that are chosen because they represent the overall economy. This group, this bucket of 30 stocks, gets lumped together under the name the Dow Jones Industrial Average, or simply the Dow. In essence, this group of 30 companies…

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