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The weighted arithmetic mean is similar to an ordinary arithmetic mean (the most common type of average), except that instead of each of the data points contributing equally to the final average, some data points contribute more than others.
In finance, the weighted-average life (WAL) of an amortizing loan or amortizing bond, also called average life, [1] [2] [3] is the weighted average of the times of the principal repayments: it's the average time until a dollar of principal is repaid. In a formula, [4] = =,
The dual use of the word "duration", as both the weighted average time until repayment and as the percentage change in price, often causes confusion. Strictly speaking, Macaulay duration is the name given to the weighted average time until cash flows are received and is measured in years. Modified duration is the name given to the price ...
Example of time-weighted return. ... this calculation is a bit complex and cumbersome for the average investor. ... Because the formula removes the impact of cash flow, it can help you gauge how ...
A weighted average, or weighted mean, is an average in which some data points count more heavily than others in that they are given more weight in the calculation. [6] For example, the arithmetic mean of 3 {\displaystyle 3} and 5 {\displaystyle 5} is 3 + 5 2 = 4 {\displaystyle {\frac {3+5}{2}}=4} , or equivalently 3 ⋅ 1 2 + 5 ⋅ 1 2 = 4 ...
A time-weighted average is any of the following: Permissible exposure limit, a legal limit in the United States for exposure of an employee to a chemical substance or physical agent such as loud noise. Time-weighted average price, the average price of a security over a specified time.
2 Formula. 3 See also. ... time-weighted average price (TWAP) is the average price of a security over a specified time. ... for example, dumping a huge number of ...
A weighted average is an average that has multiplying factors to give different weights to data at different positions in the sample window. Mathematically, the weighted moving average is the convolution of the data with a fixed weighting function.