Hi, i need help understanding this finance question from my class regarding the “Dow Jones”?

: Hi, i need help understanding this finance question from my class regarding the “Dow Jones”?
Step 6 – Invest (about – as close as you can without going over) $ 100,000 in the Dow Jones Industrial Average (DJIA). In order to do that, assume you can “buy” the index at a price equal to its value divided by 100 (e.g. if the index is 8160, then the price is $ 81.60). You will buy the index at its value at the opening of the market the first trading day, and sell it at its value at the end of the last trading day.

Using the bottom part of the spreadsheet you have already designed, display the number of units of the DJIA purchased, the opening price, the closing price, the total purchase price, and compute your profit (loss) and the ROI.
where do i find the current indexes to divide by 100
and how do i know how many units to purchase, i do have the spreadsheet if you want me to show you guys, just put your email and ill send it
DO I JUST PICK ANY INDEX from any company?

Answers and Views:

Answer by General Knowledge
Polite cough – ummmm where is your spreadsheet? I hope you are not expecting someone here to draw up the spreadsheet for you because they will not be able to post it onto Yahoo answers because we can only type in text replies here – not spreadsheets.

I suggest you find a teacher who is better than your current one for your course because you obviously have no idea what your teacher has taught you and I am assuming that is because your teacher is lousy!

Answer by Eddie W
To invest in the index, it works like this. There is a set amount of money that allows you to ‘watch’ the first 3 points of the index. You can buy either it’s going up, or down. For example, The index is now 10,000 points, the first 3 point costs you $ 8,000. You can buy either it’s going up, or down. When the index reaches 9,997 or 10,003, you’ve lose or won $ 8K. A 3-point is very narrow. If you don’t want to stomach the lose, you are allowed to extend watching the index, say $ 500 per point. For example, at the closing bell, if the Dow loses 103 points, your loss would be $ 500 X 100 + $ 8K.
$ 58K.

Answer by JoeyV
What this is getting at is that you can buy the Dow Jones by buying an ETF with ticker DIA. It’s called “Diamonds” or “SPDR Dow Jones ETF” or something. It sells for 1/100 of the value of the index more or less. Thus, at the bottom of you spread sheet you are going to put a number which represents how many DIA you are going to buy. This is =Int(100000/(Dow Jones Value/100)). Then you have to fill in some prices and get ROI and profit loss. These are all very easy Excel formulas.