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Finance Dictionary and Glossary of Investment Terms
Average
Definition 1.
An arithmetic mean return of selected stocks intended to represent the behavior of the market or some component of it. One good example is the widely quoted Dow Jones Industrial Average, which adds the current prices of the 30 DJIA stocks, and divides the results by a predetermined number, the divisor.
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Definition 2.
An arithmetic mean of a group of stocks designed to represent the overall market or some part of it, differing from an index in that it is not weighted. The Dow Jones Industrial Average is the most common average.
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