This average is weighted with respect to the number of shares acquired at each price, and not just the absolute price.Weighted averages show up in many areas of finance besides the purchase price of shares, including portfolio returns, inventory accounting and valuation.If an investor wants to calculate a weighted average of the share price he or she paid for the shares, he or she must multiply the number of shares acquired at each price by that price, add those values and then divide the total value by the total number of shares.Tags: Phd Thesis List Of SymbolsIt Company Business Plan SampleWrite Business Scholarship EssayThesis On N CinemaOlin Business School EssaysMedia Company Business PlanGood Topics To Write A Research Paper On
When a fund, which holds multiple securities, is up 10 percent on the year, that 10 percent represents a weighted average of returns for the fund with respect to the value of each position in the fund.
For inventory accounting, the weighted average value of inventory accounts for fluctuations in commodity prices, for example, while LIFO () methods give more importance to time than value.
To get the weighted average of the price paid, the investor multiplies 100 shares by $10 for year one, 50 shares by $40 for year two, and then adds the results to get a total value of $3,000.
The investor divides the total amount paid for the shares, $3,000 in this case, by the number of shares acquired over both years, 150, to get the weighted average price paid of $20.
The most influential and credible study of CSR is the Student Teacher Achievement Ratio, or STAR, study which was conducted in Tennessee during the late 1980s.
In this study, students and teachers were randomly assigned to a small class, with an average of 15 students, or a regular class, with an average of 22 students.A weighted average is extremely useful in that it allows the final average number to reflect the relative importance of each observation and is thus more descriptive than a simple average.It also has the effect of smoothing out data thereby enhancing accuracy.In recent decades, at least 24 states have mandated or incentivized class-size reduction (CSR).The current fiscal environment has forced states and districts to rethink their CSR policies given the high cost of maintaining small classes.We examine “what the research says” about whether class-size reduction has a positive impact on student learning and, if it does, by how much, for whom, and under what circumstances.Despite there being a large literature on class-size effects on academic achievement, only a few studies are of high enough quality and sufficiently relevant to be given credence as a basis for legislative action.Investors often build a position in a stock over several years.Stock prices change daily, so it's tough to keep track of the cost basis on those shares accumulated over a period of years.A weighted average is most often computed with respect to the frequency of the values in a data set.One can calculate a weighted average in different ways.