stocks

When IBM announces its intention to split its stock, let us say a split of 2:1, the news is interpreted as reducing the volatility of the DJ30, and it sometimes leads to an increase in the IBM share price, adjusted for the split. Explain the possible reasons for both effects, the anticipated reduction in the DJ30 volatility and the increase in value. (Note: IBM is one of the DJ30 stocks.)

Take a shot. The DJ volatility can be explained with simple mathmatics. Further, the IBM share split is a signal to investors. What perhaps could the signal be?

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asked by joe

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