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how to calculate a weighted average maturity. First of all the amount weighed by multiplying the amount of each document by the maturity of the relevant document is determined. Understanding Weighted Average Maturity WAM is calculated by computing the percentage value of each mortgage or debt instrument in the portfolio.
Weighted Average Shares Outstanding Example How To Calculate from corporatefinanceinstitute.com
To find your weighted average simply multiply each number by its weight factor and then sum the resulting numbers up. Follow these steps to calculate weighted average. By gathering these weighted amounts obtained and dividing the result by the number of documents the desired result is obtained.
The WAM can be calculated by determining the weight of each maturity in the average multiplying that weight by the securitys maturity and summing the weighted maturities.
The math behind calculating a bonds WAL adds the individual weighted principal payment amounts over a certain number of years which are then divided by the sum of the unweighted payments. How is the weighted average maturity calculated. For example 100 paid in one year has a present value of 9091 before a 10-percent interest. The WAM can be calculated by determining the weight of each maturity in the average multiplying that weight by the securitys maturity and summing the weighted maturities.
