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When analyzing a company's results for investment purposes or in order to provide a valuation of the business, accountants will take average earnings or net income into account. A simple average of ...
However, averages are also calculable from percentages. As an example, grades in a course might be weighted differently between tests. If that's the case, a simple average would bias the result.
To calculate a price-weighted average, sum the stock prices and divide by the number of stocks. This average reflects changes in higher-priced stocks more than lower-priced ones. Use price-weighted ...
On the other hand, if Intel stock experienced the same 20% move to $34.56, it would translate to a price-weighted average of $60.14, or a move of just 3.3%. So Apple's 20% move has more than three ...