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Weighted Average
Weighted Average is an average where computing is based on the weight that each component carries in itself.
If one fund, for example, consists of 3 stocks where each stock has different percentage in the fund, lets say 10%, 30% and 60%, and a price of $10, $20 and $30 respectively, than the weighted average stock price in the fund will be:
(0.10*$10) + (0.30*$20) + (0.60*$30) = 25
In weighted average calculation, the greatest impact on the result will have the value with greatest weight.
| Related Terms: Earnings per Share - EPS Ultimate Oscillator Volume Weighted Average Price-VWAP |