On a logarithmic scale or graph, comparable percentage changes in the value of an investment, index, or average appear to be similar. However, the actual underlying change in value may be significantly different.
For example, a stock whose price increases during the year from $25 to $50 a share has the same percentage change as a stock whose price increases from $100 to $200 a share.
On a logarithmic scale, it's irrelevant that the dollar value of the second stock is four times the value of the first.
Similarly, the percentage change in the Dow Jones Industrial Average (DJIA) as it rose from 1,000 to 2,000 is comparable to the percentage change when it moved from 4,000 to 8,000.
Yahoo Finance - Cite This Source - This Definition
- Average, DIAMONDs, Dogs of the Dow, Dow Jones 65 Composite Average, Dow Jones Industrial Average (DJIA), Dow Jones Transportation Average, Dow Jones Utility Average, Dow theory, NASDAQ Composite Index, Nikkei Stock Average, Qubes, Weighted stock index
All > Business > Finance > Personal Finance