INDUSTRIAL AVERAGE Meaning and
Definition
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The term "industrial average" refers to a statistical measure that represents the overall performance or trends of a particular sector in the economy. Specifically, it refers to a stock market index or an average value of selected stocks within a specific industry or sector. This indicator provides insights into the overall health and direction of the companies and, thus, the economy in that specific segment.
The industrial average is typically calculated by compiling the prices or market values of a predetermined set of stocks that represent a significant proportion of the particular industry. These stocks are often chosen based on their market capitalization or their significance in the sector. The calculated average serves as a benchmark or reference point against which individual companies' performance can be gauged.
Investors and financial analysts utilize industrial averages to determine the overall strength, growth, and stability of the industry. Fluctuations in the average value can indicate changes in market sentiment, economic conditions, or industry-specific factors. Comparisons between the industrial average and individual company stock prices can help investors make informed decisions about buying/selling stocks and developing investment strategies.
In conclusion, the industrial average is a statistical measure that represents the overall performance and trends of a specific industry or sector. It encompasses a compilation of selected stocks that serve as a reference point for evaluating the overall health and direction of the industry.
Common Misspellings for INDUSTRIAL AVERAGE
- undustrial average
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- insustrial average
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- ineustrial average
- indystrial average
- indhstrial average
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- indistrial average
Etymology of INDUSTRIAL AVERAGE
The term "industrial average" is derived from the word "industry" and the word "average".
The word "industry" traces back to the Latin word "industria", meaning "diligence, purposeful activity, or industry". It eventually evolved into the Old French word "industrie" before being adopted into Middle English.
On the other hand, the word "average" has its roots in the Arabic word "ʿawār" and the Latin term "averia". "ʿawār" referred to the damaged goods or defects in a shipment or cargo, while "averia" was used in maritime law to depict the apportionment of costs of such damages.
The combination of these two words led to the term "industrial average", which typically refers to a stock market index representing the performance of a specific group of industrial stocks.
