Paul A. Mueller, Raj A. Padmaraj and Ralph C. St. John
Does the method of divisor adjustment used for stocksplits in the Dow Jones Industrial Average (DJIA) cause a downward bias in the average’s level and does this method of…
Abstract
Does the method of divisor adjustment used for stocksplits in the Dow Jones Industrial Average (DJIA) cause a downward bias in the average’s level and does this method of adjustment cause increased volatility in the average? To investigate these issues, two averages are created using DJIA stocks. One average is adjusted for stock splits through adjustment in the divisor. This method is identical to the DJIA method of adjustment.The other average makes adjustment for stock splits by adjusting the stock value in the numerator. Relative to these two methods of adjustment for stock splits, there sults of the study demonstrate that there is no downward bias of the DJIA. Additionally, it is found that the method of divisor adjustment for stock splits does not increase the volatility of the average. When compared to the Standard and Poor’s Industrial Index, the DJIA does show downward bias.
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Raj Padmaraj, Kenneth Balinski and Josef Blass
With the enactment of the Tax Equity and Fiscal Responsibility Acts of 1982 (TEFRA) a number of legislative changes were introduced in the self‐employed business person’s…
Abstract
With the enactment of the Tax Equity and Fiscal Responsibility Acts of 1982 (TEFRA) a number of legislative changes were introduced in the self‐employed business person’s retirement plans known as the Keogh plans. the intention of the legislature was to liberalize and modify many of the plan rules making the plans more attractive especially to small, self‐employed business owners. The basic approach taken by Congress was to put the self‐employed retirement plans on parity with much more generous corporate plans.