# Divisor Continuity Adjustment

`D03-F01-A03` · Index and Benchmark Engineering → Index Initialization and Continuity · archetype `record-transform` · difficulty 3/5 · verification **verified**

Full page: https://docs.thefintechbuilder.com/index-and-benchmark-engineering/index-initialization-and-continuity/divisor-continuity-adjustment/
Agent skill: `npx skills add IslamBaraka90/Fintech-Algorithms-Library` — https://docs.thefintechbuilder.com/guides/agent-skill/

## Install and import

```bash
npm install fintech-algorithms
```

```ts
import { calculate } from "fintech-algorithms/index-and-benchmark-engineering/index-initialization-and-continuity/divisor-continuity-adjustment";
```

## Signature

```ts
calculate(data)
```

Rescales the divisor when market value changes for a non-market reason — a share issue, a member swap — so the level does not jump. This is the mechanism that makes an index a continuous series rather than a sum of unrelated numbers.

## Parameters

| Name | Type | Required | Notes |
| --- | --- | --- | --- |
| `data` | `{ oldMarketValue: number; newMarketValue: number; oldDivisor: number }` | yes | The market value immediately before and after the change, and the divisor in force before it. Both values must be measured at the same prices — a divisor adjustment that also absorbs a price move is the classic error. |

## Returns

`{ oldLevel, newDivisor, bridgedLevel, continuityError }`

The new divisor plus `continuityError` — the residual difference between the level before and after. It should be zero or floating-point dust; anything larger means the inputs were not measured at the same instant.

## Errors

- When any market value or divisor is not positive — throws

## Complexity

Time `O(1)`, space `O(1)`.

## Worked example

This is the worked example published in the article, replayed by the test suite on every run. The output cannot drift.

### Input

`data`:

```json
{
  "oldMarketValue": 100000000,
  "newMarketValue": 112000000,
  "oldDivisor": 100000
}
```

### Call

```ts
calculate(data)
```

### Returns

object with 4 fields: oldLevel, newDivisor, bridgedLevel, continuityError

```json
{
  "oldLevel": 1000,
  "newDivisor": 112000,
  "bridgedLevel": 1000,
  "continuityError": 0
}
```

## Verification and provenance

Tier: **verified** (via input-expected).

The worked example below is the figure published in this algorithm's article, replayed and asserted by the test suite on every build. The arithmetic cannot drift without the build failing.

Both tiers guarantee the signature. Full explanation: https://docs.thefintechbuilder.com/guides/verification/

Generated from the docs.json payload shipped inside fintech-algorithms@0.13.1.
The signature and parameter list are checked against the compiled implementation at build time,
so a description that contradicts the code fails the build rather than reaching this file.

## Links

- Article (how it works, step by step): https://thefintechbuilder.com/index-and-benchmark-engineering/index-initialization-and-continuity/divisor-continuity-adjustment/
- Implementation source: https://github.com/IslamBaraka90/Fintech-Algorithms-Library/blob/main/src/index-and-benchmark-engineering/index-initialization-and-continuity/divisor-continuity-adjustment/impl.ts
- Package on npm: https://www.npmjs.com/package/fintech-algorithms
- Domain index for agents: https://docs.thefintechbuilder.com/index-and-benchmark-engineering/llms.txt