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how to calculate weighted average yield. Many jobs across multiple fields require the calculation of weighted averages. The calculation is as follows.
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The weight is the proportion of total portfolio value that each security represents. Say that 1 only happens 10 of the time while 2 and 3 each happen 45 of the time. In these cases calculating a weighted average gives users a more accurate.
However the weighted average formula looks at how relevant each number is.
This is the weighted average gross annualised yield for all trades that closed in the corresponding time period. The normal average of a data-set becomes less useful when certain numbers are occurring more frequently than others. Aggregate interest payments Aggregate debt outstanding Weighted average interest rate For example a business has a 1000000 loan outstanding on which it pays a 6 interest rate. A weighted average helps the user gather a more accurate look at a set of data than the normal average alone.
