What’s the formula ?
When a stock says its worth so many points how does that convert to dollars?
For instance S&P is 2,945.64. Is that the price per share?
When a stock says its worth so many points how does that convert to dollars?
For instance S&P is 2,945.64. Is that the price per share?
Hi, thanks for the question. That appears to be correct, more or less - the S&P 500 represents the collective market cap of its components (share price * shares outstanding) divided by the sum of all the shares outstanding. It's not literally presented in dollars, but is the equivalent as I understand it. Here are some references:
https://us.spindices.com/documents/methodologies/methodology-index-math.pdf
https://en.wikipedia.org/wiki/S%26P_500_Index