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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.
An exponential moving average (EMA), also known as an exponentially weighted moving average (EWMA), [5] is a first-order infinite impulse response filter that applies weighting factors which decrease exponentially. The weighting for each older datum decreases exponentially, never reaching zero. This formulation is according to Hunter (1986). [6]
The weighted average cost of capital (WACC) is the rate that a company is expected to pay on average to all its security holders to finance its assets. The WACC is commonly referred to as the firm's cost of capital. Importantly, it is dictated by the external market and not by management.
Despite the newly abstract situation, this definition is extremely similar in nature to the very simplest definition of expected values, given above, as certain weighted averages. This is because, in measure theory, the value of the Lebesgue integral of X is defined via weighted averages of approximations of X which take on finitely many values ...
The expected value of a random variable is the weighted average of the possible values it might take on, with the weights being the respective probabilities. More generally, the expected value of a function of a random variable is the probability-weighted average of the values the function takes on for each possible value of the random variable.
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 ...
Weighted average cost is a method of calculating ending inventory cost. It can also be referred to as "WAVCO". It takes cost of goods available for sale and divides it by the number of units available for sale (number of goods from beginning inventory + purchases/production). This gives a weighted average cost per unit. A physical count is then ...
Bond duration is the weighted-average time to receive the discounted present values of all the cash flows (including both principal and interest), while WAL is the weighted-average time to receive simply the principal payments (not including interest, and not discounting). For an amortizing loan with equal payments, the WAL will be higher than ...