{"id":192847,"date":"2025-02-10T06:30:00","date_gmt":"2025-02-10T05:30:00","guid":{"rendered":"https:\/\/datascientest.com\/en\/?p=192847"},"modified":"2025-02-07T19:12:39","modified_gmt":"2025-02-07T18:12:39","slug":"all-about-weighted-average","status":"publish","type":"post","link":"https:\/\/datascientest.com\/en\/all-about-weighted-average","title":{"rendered":"Weighted average: What is it? How to calculate it?"},"content":{"rendered":"\t\t<div data-elementor-type=\"wp-post\" data-elementor-id=\"192847\" class=\"elementor elementor-192847\" data-elementor-post-type=\"post\">\n\t\t\t\t\t\t\t<div class=\"elementor-element elementor-element-80c5b55 e-flex e-con-boxed e-con\" data-id=\"80c5b55\" data-element_type=\"container\" data-settings=\"{&quot;content_width&quot;:&quot;boxed&quot;}\">\n\t\t\t\t\t<div class=\"e-con-inner\">\n\t\t\t\t<div class=\"elementor-element elementor-element-6191e77 elementor-widget elementor-widget-text-editor\" data-id=\"6191e77\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t<style>\/*! elementor - v3.15.0 - 02-08-2023 *\/\n.elementor-widget-text-editor.elementor-drop-cap-view-stacked .elementor-drop-cap{background-color:#69727d;color:#fff}.elementor-widget-text-editor.elementor-drop-cap-view-framed .elementor-drop-cap{color:#69727d;border:3px solid;background-color:transparent}.elementor-widget-text-editor:not(.elementor-drop-cap-view-default) .elementor-drop-cap{margin-top:8px}.elementor-widget-text-editor:not(.elementor-drop-cap-view-default) .elementor-drop-cap-letter{width:1em;height:1em}.elementor-widget-text-editor .elementor-drop-cap{float:left;text-align:center;line-height:1;font-size:50px}.elementor-widget-text-editor .elementor-drop-cap-letter{display:inline-block}<\/style>\t\t\t\t<p><b>When used for analytical purposes, calculating a simple average can be misleading. By applying weights to certain numbers in a list, you can achieve a much more precise understanding.<\/b><\/p>\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-194a507 elementor-widget elementor-widget-text-editor\" data-id=\"194a507\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t<p><span style=\"font-weight: 400;\">Not all information has the same level of importance, and any insightful analysis of a sector needs to account for this factor. Relying on straightforward formulas like the average of a number series often leads to inadequate decisions.<\/span><\/p><p><span style=\"font-weight: 400;\">Let&#8217;s consider a straightforward example to illustrate this. At the end of the year, a teacher uses the following criterion to determine if students can advance to the next grade: their average score must be higher than 10. Here is a simplified table with the scores of several students.<\/span><\/p>\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-da5db07 elementor-widget elementor-widget-html\" data-id=\"da5db07\" data-element_type=\"widget\" data-widget_type=\"html.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t<style type=\"text\/css\">\r\n.tg  {border-collapse:collapse;border-spacing:0;}\r\n.tg td{border-color:black;border-style:solid;border-width:1px;font-family:Rubik, sans-serif;font-size:18px;\r\n  overflow:hidden;padding:10px 5px;word-break:normal;}\r\n.tg th{border-color:black;border-style:solid;border-width:1px;font-family:Rubik, sans-serif;font-size:18px;\r\n  font-weight:normal;overflow:hidden;padding:18px 5px;word-break:normal;}\r\n.tg .tg-9y4c{background-color:#efefef;font-size:18px;font-weight:bold;text-align:center;vertical-align:middle}\r\n.tg .tg-u1w2{background-color:#c0c0c0;font-size:18px;font-weight:bold;text-align:left;vertical-align:middle}\r\n.tg .tg-hb7x{background-color:#efefef;font-size:18px;text-align:center;vertical-align:middle}\r\n.tg .tg-wysk{background-color:#ffffff;font-size:18px;text-align:left;vertical-align:middle}\r\n.tg .tg-8iu8{background-color:#c0c0c0;font-size:18px;font-weight:bold;text-align:center;vertical-align:middle}\r\n.tg .tg-0p7h{background-color:#c0c0c0;font-size:18px;text-align:left;vertical-align:middle}\r\n<\/style>\r\n<table class=\"tg\" style=\"undefined;table-layout: fixed; width: 417px\"><colgroup>\r\n<col style=\"width: 200px\">\r\n<col style=\"width: 100px\">\r\n<col style=\"width: 100px\">\r\n<col style=\"width: 100px\">\r\n<\/colgroup>\r\n<thead>\r\n  <tr>\r\n    <th class=\"tg-wysk\"><\/th>\r\n    <th class=\"tg-8iu8\"><span style=\"font-weight:700;font-style:normal;text-decoration:none;color:#000\">Joey<\/span><\/th>\r\n    <th class=\"tg-8iu8\"><span style=\"font-weight:700;font-style:normal;text-decoration:none;color:#000\">Monica<\/span><\/th>\r\n    <th class=\"tg-8iu8\"><span style=\"font-weight:700;font-style:normal;text-decoration:none;color:#000\">Rachel<\/span><\/th>\r\n  <\/tr><\/thead>\r\n<tbody>\r\n  <tr>\r\n    <td class=\"tg-0p7h\"><span style=\"font-weight:400;font-style:normal;text-decoration:none;color:#000\">Test 1<\/span><\/td>\r\n    <td class=\"tg-hb7x\"><span style=\"font-weight:400;font-style:normal;text-decoration:none;color:#000\">12<\/span><\/td>\r\n    <td class=\"tg-hb7x\"><span style=\"font-weight:400;font-style:normal;text-decoration:none;color:#000\">7<\/span><\/td>\r\n    <td class=\"tg-hb7x\"><span style=\"font-weight:400;font-style:normal;text-decoration:none;color:#000\">11<\/span><\/td>\r\n  <\/tr>\r\n  <tr>\r\n    <td class=\"tg-0p7h\"><span style=\"font-weight:400;font-style:normal;text-decoration:none;color:#000\">Midterm Exam<\/span><\/td>\r\n    <td class=\"tg-hb7x\"><span style=\"font-weight:400;font-style:normal;text-decoration:none;color:#000\">9<\/span><\/td>\r\n    <td class=\"tg-hb7x\"><span style=\"font-weight:400;font-style:normal;text-decoration:none;color:#000\">12<\/span><\/td>\r\n    <td class=\"tg-hb7x\"><span style=\"font-weight:400;font-style:normal;text-decoration:none;color:#000\">12<\/span><\/td>\r\n  <\/tr>\r\n  <tr>\r\n    <td class=\"tg-0p7h\"><span style=\"font-weight:400;font-style:normal;text-decoration:none;color:#000\">Test 2<\/span><\/td>\r\n    <td class=\"tg-hb7x\"><span style=\"font-weight:400;font-style:normal;text-decoration:none;color:#000\">14<\/span><\/td>\r\n    <td class=\"tg-hb7x\"><span style=\"font-weight:400;font-style:normal;text-decoration:none;color:#000\">6<\/span><\/td>\r\n    <td class=\"tg-hb7x\"><span style=\"font-weight:400;font-style:normal;text-decoration:none;color:#000\">10<\/span><\/td>\r\n  <\/tr>\r\n  <tr>\r\n    <td class=\"tg-0p7h\"><span style=\"font-weight:400;font-style:normal;text-decoration:none;color:#000\">End-of-Year Exam<\/span><\/td>\r\n    <td class=\"tg-hb7x\"><span style=\"font-weight:400;font-style:normal;text-decoration:none;color:#000\">8<\/span><\/td>\r\n    <td class=\"tg-hb7x\"><span style=\"font-weight:400;font-style:normal;text-decoration:none;color:#000\">14<\/span><\/td>\r\n    <td class=\"tg-hb7x\"><span style=\"font-weight:400;font-style:normal;text-decoration:none;color:#000\">11<\/span><\/td>\r\n  <\/tr>\r\n  <tr>\r\n    <td class=\"tg-u1w2\"><span style=\"font-weight:700;font-style:normal;text-decoration:none;color:#000\">Average<\/span><\/td>\r\n    <td class=\"tg-9y4c\"><span style=\"font-weight:700;font-style:normal;text-decoration:none;color:#000\">10,75<\/span><\/td>\r\n    <td class=\"tg-9y4c\"><span style=\"font-weight:700;font-style:normal;text-decoration:none;color:#000\">9,75<\/span><\/td>\r\n    <td class=\"tg-9y4c\"><span style=\"font-weight:700;font-style:normal;text-decoration:none;color:#000\">11<\/span><\/td>\r\n  <\/tr>\r\n<\/tbody><\/table>\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-afaad50 elementor-widget elementor-widget-text-editor\" data-id=\"afaad50\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t<p><span style=\"font-weight: 400;\">Here, we have three students: Joey, Monica, and Rachel. Each has been assessed through four different exams: Test 1, the Midterm Exam, Test 2, and so on.<\/span><\/p><p><span style=\"font-weight: 400;\">By applying an average to these scores, it appears that two students have a sufficient score to advance: Joey and Rachel. Monica, on the other hand, does not pass.<\/span><\/p>\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-3340800 elementor-align-center button-principal elementor-widget elementor-widget-button\" data-id=\"3340800\" data-element_type=\"widget\" data-widget_type=\"button.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<div class=\"elementor-button-wrapper\">\n\t\t\t<a class=\"elementor-button elementor-button-link elementor-size-sm\" href=\"https:\/\/datascientest.com\/en\/data-courses\">\n\t\t\t\t\t\t<span class=\"elementor-button-content-wrapper\">\n\t\t\t\t\t\t<span class=\"elementor-button-text\">Learn to calculate a weighted average<\/span>\n\t\t<\/span>\n\t\t\t\t\t<\/a>\n\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t<div class=\"elementor-element elementor-element-642f82c e-flex e-con-boxed e-con\" data-id=\"642f82c\" data-element_type=\"container\" data-settings=\"{&quot;content_width&quot;:&quot;boxed&quot;}\">\n\t\t\t\t\t<div class=\"e-con-inner\">\n\t\t\t\t<div class=\"elementor-element elementor-element-5213b97 elementor-widget elementor-widget-heading\" data-id=\"5213b97\" data-element_type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t<style>\/*! elementor - v3.15.0 - 02-08-2023 *\/\n.elementor-heading-title{padding:0;margin:0;line-height:1}.elementor-widget-heading .elementor-heading-title[class*=elementor-size-]>a{color:inherit;font-size:inherit;line-height:inherit}.elementor-widget-heading .elementor-heading-title.elementor-size-small{font-size:15px}.elementor-widget-heading .elementor-heading-title.elementor-size-medium{font-size:19px}.elementor-widget-heading .elementor-heading-title.elementor-size-large{font-size:29px}.elementor-widget-heading .elementor-heading-title.elementor-size-xl{font-size:39px}.elementor-widget-heading .elementor-heading-title.elementor-size-xxl{font-size:59px}<\/style><h3 class=\"elementor-heading-title elementor-size-default\">What is the Principle of Weighted Average?<\/h3>\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-2dc3543 elementor-widget elementor-widget-text-editor\" data-id=\"2dc3543\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t<p><span style=\"font-weight: 400;\">When calculating a weighted average, we consider that not all exams have the same significance. For instance, the Midterm Exam is twice as important as the tests. Similarly, the End-of-Year Exam is four times as important as a single test since it encompasses all concepts taught throughout the year.<\/span><\/p><p><span style=\"font-weight: 400;\">The weighted average takes this into account by assigning a weight to each exam. Therefore, tests have a coefficient of 1, the Midterm Exam a coefficient of 2, and the End-of-Year Exam a coefficient of 4.<\/span><\/p><p><span style=\"font-weight: 400;\">From there, the weighted average is calculated as follows:<\/span><\/p><pre style=\"padding-left: 40px;\"><b>(score x coefficient) + (score x coefficient) + (\u2026) \/ sum of coefficients<\/b><\/pre>\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-8c70151 elementor-widget elementor-widget-html\" data-id=\"8c70151\" data-element_type=\"widget\" data-widget_type=\"html.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t<style type=\"text\/css\">\r\n.tg  {border-collapse:collapse;border-spacing:0;}\r\n.tg td{border-color:black;border-style:solid;border-width:1px;font-family:Rubik, sans-serif;font-size:14px;\r\n  overflow:hidden;padding:10px 5px;word-break:normal;}\r\n.tg th{border-color:black;border-style:solid;border-width:1px;font-family:Rubik, sans-serif;font-size:14px;\r\n  font-weight:normal;overflow:hidden;padding:10px 5px;word-break:normal;}\r\n.tg .tg-bh3s{background-color:#c0c0c0;border-color:inherit;font-size:18px;text-align:left;vertical-align:middle}\r\n.tg .tg-ax4h{border-color:inherit;font-family:Arial, Helvetica, sans-serif !important;font-size:18px;font-weight:bold;\r\n  text-align:left;vertical-align:middle}\r\n.tg .tg-8l1m{background-color:#efefef;border-color:inherit;font-size:18px;text-align:center;vertical-align:middle}\r\n.tg .tg-aa1j{background-color:#c0c0c0;border-color:inherit;font-size:18px;font-weight:bold;text-align:center;vertical-align:middle}\r\n.tg .tg-u96p{background-color:#ffffff;border-color:inherit;font-size:18px;text-align:left;vertical-align:middle}\r\n.tg .tg-ylbt{background-color:#c0c0c0;border-color:inherit;font-family:Rubik, Helvetica, sans-serif !important;font-size:18px;\r\n  font-weight:bold;text-align:center;vertical-align:middle}\r\n.tg .tg-88qu{background-color:#efefef;border-color:inherit;font-family:Rubik, Helvetica, sans-serif !important;font-size:18px;\r\n  text-align:center;vertical-align:middle}\r\n.tg .tg-zpf4{border-color:inherit;font-family:Rubik, Helvetica, sans-serif !important;font-size:18px;text-align:center;\r\n  vertical-align:middle}\r\n.tg .tg-2hyw{background-color:#c0c0c0;border-color:inherit;font-family:Rubik, Helvetica, sans-serif !important;font-size:18px;\r\n  text-align:left;vertical-align:middle}\r\n.tg .tg-r5qm{border-color:inherit;font-size:18px;text-align:left;vertical-align:middle}\r\n.tg .tg-i801{border-color:inherit;font-family:Rubik, Helvetica, sans-serif !important;font-size:18px;font-weight:bold;\r\n  text-align:center;vertical-align:middle}\r\n.tg .tg-nnwx{border-color:inherit;font-size:18px;font-weight:bold;text-align:center;vertical-align:middle}\r\n<\/style>\r\n<table class=\"tg\" style=\"undefined;table-layout: fixed; width: 529px\"><colgroup>\r\n<col style=\"width: 200px\">\r\n<col style=\"width: 125px\">\r\n<col style=\"width: 100px\">\r\n<col style=\"width: 100px\">\r\n<col style=\"width: 100px\">\r\n<\/colgroup>\r\n<thead>\r\n  <tr>\r\n    <th class=\"tg-u96p\"><\/th>\r\n    <th class=\"tg-aa1j\"><span style=\"font-style:normal;text-decoration:none;color:#000;background-color:transparent\">coefficient<\/span><\/th>\r\n    <th class=\"tg-ylbt\"><span style=\"font-style:normal;text-decoration:none;color:#000;background-color:transparent\">Joey<\/span><\/th>\r\n    <th class=\"tg-aa1j\"><span style=\"font-style:normal;text-decoration:none;color:#000;background-color:transparent\">Monica<\/span><\/th>\r\n    <th class=\"tg-ylbt\"><span style=\"font-style:normal;text-decoration:none;color:#000\">Rachel<\/span><\/th>\r\n  <\/tr><\/thead>\r\n<tbody>\r\n  <tr>\r\n    <td class=\"tg-bh3s\"><span style=\"font-weight:400;font-style:normal;text-decoration:none;color:#000;background-color:transparent\">Test 1<\/span><\/td>\r\n    <td class=\"tg-8l1m\"><span style=\"font-weight:400;font-style:normal;text-decoration:none;color:#000;background-color:transparent\">1<\/span><\/td>\r\n    <td class=\"tg-88qu\"><span style=\"font-weight:400;font-style:normal;text-decoration:none;color:#000;background-color:transparent\">12<\/span><\/td>\r\n    <td class=\"tg-8l1m\"><span style=\"font-weight:400;font-style:normal;text-decoration:none;color:#000;background-color:transparent\">7<\/span><\/td>\r\n    <td class=\"tg-zpf4\"><span style=\"font-weight:400;font-style:normal;text-decoration:none;color:#000;background-color:transparent\">11<\/span><\/td>\r\n  <\/tr>\r\n  <tr>\r\n    <td class=\"tg-bh3s\"><span style=\"font-weight:400;font-style:normal;text-decoration:none;color:#000;background-color:transparent\">Midterm Exam<\/span><\/td>\r\n    <td class=\"tg-8l1m\"><span style=\"font-weight:400;font-style:normal;text-decoration:none;color:#000;background-color:transparent\">2<\/span><\/td>\r\n    <td class=\"tg-88qu\"><span style=\"font-weight:400;font-style:normal;text-decoration:none;color:#000;background-color:transparent\">18<\/span><\/td>\r\n    <td class=\"tg-8l1m\"><span style=\"font-weight:400;font-style:normal;text-decoration:none;color:#000;background-color:transparent\">24<\/span><\/td>\r\n    <td class=\"tg-zpf4\"><span style=\"font-weight:400;font-style:normal;text-decoration:none;color:#000;background-color:transparent\">24<\/span><\/td>\r\n  <\/tr>\r\n  <tr>\r\n    <td class=\"tg-bh3s\"><span style=\"font-weight:400;font-style:normal;text-decoration:none;color:#000;background-color:transparent\">Test 2<\/span><\/td>\r\n    <td class=\"tg-8l1m\"><span style=\"font-weight:400;font-style:normal;text-decoration:none;color:#000;background-color:transparent\">1<\/span><\/td>\r\n    <td class=\"tg-88qu\"><span style=\"font-weight:400;font-style:normal;text-decoration:none;color:#000;background-color:transparent\">14<\/span><\/td>\r\n    <td class=\"tg-8l1m\"><span style=\"font-weight:400;font-style:normal;text-decoration:none;color:#000;background-color:transparent\">6<\/span><\/td>\r\n    <td class=\"tg-zpf4\"><span style=\"font-weight:400;font-style:normal;text-decoration:none;color:#000;background-color:transparent\">10<\/span><\/td>\r\n  <\/tr>\r\n  <tr>\r\n    <td class=\"tg-2hyw\"><span style=\"font-weight:400;font-style:normal;text-decoration:none;color:#000;background-color:transparent\">End-of-Year Exam<\/span><\/td>\r\n    <td class=\"tg-88qu\"><span style=\"font-weight:400;font-style:normal;text-decoration:none;color:#000;background-color:transparent\">4<\/span><\/td>\r\n    <td class=\"tg-88qu\"><span style=\"font-weight:400;font-style:normal;text-decoration:none;color:#000;background-color:transparent\">32<\/span><\/td>\r\n    <td class=\"tg-88qu\"><span style=\"font-weight:400;font-style:normal;text-decoration:none;color:#000;background-color:transparent\">56<\/span><\/td>\r\n    <td class=\"tg-zpf4\"><span style=\"font-weight:400;font-style:normal;text-decoration:none;color:#000;background-color:transparent\">44<\/span><\/td>\r\n  <\/tr>\r\n  <tr>\r\n    <td class=\"tg-ax4h\"><span style=\"font-weight:700;font-style:normal;text-decoration:none;color:#000;background-color:transparent\">Weighted Average<\/span><\/td>\r\n    <td class=\"tg-r5qm\"><\/td>\r\n    <td class=\"tg-i801\"><span style=\"font-weight:700;font-style:normal;text-decoration:none;color:#000;background-color:transparent\">9,5<\/span><\/td>\r\n    <td class=\"tg-nnwx\"><span style=\"font-weight:700;font-style:normal;text-decoration:none;color:#000;background-color:transparent\">11,63<\/span><\/td>\r\n    <td class=\"tg-i801\"><span style=\"font-weight:700;font-style:normal;text-decoration:none;color:#000;background-color:transparent\">11,13<\/span><\/td>\r\n  <\/tr>\r\n<\/tbody><\/table>\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-e352797 elementor-widget elementor-widget-text-editor\" data-id=\"e352797\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t<p><span style=\"font-weight: 400;\">For example, Joey&#8217;s weighted average is calculated as follows: (12 x 1) + (9 x 2) + (14 x 1) + (8 x 4) \/ 8. And what does this calculation reveal? A completely different scenario. Now, Monica emerges as the top student and passes with flying colors, while Joey does not!<\/span><\/p>\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t<div class=\"elementor-element elementor-element-07615dd e-flex e-con-boxed e-con\" data-id=\"07615dd\" data-element_type=\"container\" data-settings=\"{&quot;content_width&quot;:&quot;boxed&quot;}\">\n\t\t\t\t\t<div class=\"e-con-inner\">\n\t\t\t\t<div class=\"elementor-element elementor-element-953dcf0 elementor-widget elementor-widget-heading\" data-id=\"953dcf0\" data-element_type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t<h3 class=\"elementor-heading-title elementor-size-default\">What are the Advantages of the Weighted Average?<\/h3>\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-131e7e2 elementor-widget elementor-widget-text-editor\" data-id=\"131e7e2\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t<p><span style=\"font-weight: 400;\">As this example demonstrates, the weighted average provides a much clearer picture of each student&#8217;s level. This creates <\/span><b>a tool that enables informed decision-making<\/b><span style=\"font-weight: 400;\">.<\/span><\/p><p><span style=\"font-weight: 400;\">Consider an online store collecting customer reviews. It has a trigger system: if average ratings fall below 3 out of 5 over a week, corrective actions must be promptly taken. But imagine that among its customers, there are 5 key clients representing 60% of the revenue. Their opinions are crucial, so their ratings should carry more weight than those of occasional buyers. As such, the weighted average can <\/span><b>highlight underlying trends that might go unnoticed<\/b><span style=\"font-weight: 400;\">.<\/span><\/p>\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-d3ea721 elementor-align-center button-principal elementor-widget elementor-widget-button\" data-id=\"d3ea721\" data-element_type=\"widget\" data-widget_type=\"button.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<div class=\"elementor-button-wrapper\">\n\t\t\t<a class=\"elementor-button elementor-button-link elementor-size-sm\" href=\"https:\/\/datascientest.com\/en\/data-analyst-course\">\n\t\t\t\t\t\t<span class=\"elementor-button-content-wrapper\">\n\t\t\t\t\t\t<span class=\"elementor-button-text\">Master the principles of statistics<\/span>\n\t\t<\/span>\n\t\t\t\t\t<\/a>\n\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t<div class=\"elementor-element elementor-element-0476486 e-flex e-con-boxed e-con\" data-id=\"0476486\" data-element_type=\"container\" data-settings=\"{&quot;content_width&quot;:&quot;boxed&quot;}\">\n\t\t\t\t\t<div class=\"e-con-inner\">\n\t\t\t\t<div class=\"elementor-element elementor-element-fbc26ae elementor-widget elementor-widget-heading\" data-id=\"fbc26ae\" data-element_type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t<h3 class=\"elementor-heading-title elementor-size-default\">How to Weigh a Portfolio of Stocks?<\/h3>\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-5ed6c19 elementor-widget elementor-widget-image\" data-id=\"5ed6c19\" data-element_type=\"widget\" data-widget_type=\"image.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t<style>\/*! elementor - v3.15.0 - 02-08-2023 *\/\n.elementor-widget-image{text-align:center}.elementor-widget-image a{display:inline-block}.elementor-widget-image a img[src$=\".svg\"]{width:48px}.elementor-widget-image img{vertical-align:middle;display:inline-block}<\/style>\t\t\t\t\t\t\t\t\t\t\t\t<img decoding=\"async\" width=\"1000\" height=\"571\" src=\"https:\/\/datascientest.com\/en\/files\/2025\/01\/weighted-average-datascientest-1.webp\" class=\"attachment-full size-full wp-image-192850\" alt=\"\" srcset=\"https:\/\/datascientest.com\/en\/files\/2025\/01\/weighted-average-datascientest-1.webp 1000w, https:\/\/datascientest.com\/en\/files\/2025\/01\/weighted-average-datascientest-1-300x171.webp 300w, https:\/\/datascientest.com\/en\/files\/2025\/01\/weighted-average-datascientest-1-768x439.webp 768w\" sizes=\"(max-width: 1000px) 100vw, 1000px\" \/>\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-6616f95 elementor-widget elementor-widget-text-editor\" data-id=\"6616f95\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t<p><span style=\"font-weight: 400;\">The concept of the weighted average is so crucial that it is utilized when calculating the capital gains an investor must report to tax authorities following stock sales. Once again, an example clarifies the necessity of this calculation.<\/span><\/p><p><span style=\"font-weight: 400;\">Consider an investor who buys:<\/span><\/p><ul><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">100 shares at \u20ac20 from a startup in the first year<\/span><\/li><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">200 shares at \u20ac50 from the same startup the next year.<\/span><\/li><\/ul>\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-cd11297 elementor-widget elementor-widget-text-editor\" data-id=\"cd11297\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t<p><span style=\"font-weight: 400;\">If the investor merely uses a &#8220;simple&#8221; average based on what was spent, they get an average of \u20ac35. However, this is misleading because it gives equal importance to the amounts paid (\u20ac20 and \u20ac50). Selling shares for \u20ac38 might falsely appear as a profit. In reality, it isn&#8217;t.<\/span><\/p><p><span style=\"font-weight: 400;\">To find the weighted average, multiply the 100 shares by \u20ac20 for the first year and the 200 shares by \u20ac50 for the second year: 2,000 + 10,000 equals 12,000 euros in total. This sum is then divided by the total number of shares acquired (300). You get a weighted average of \u20ac40, suggesting that a sale at \u20ac38 would actually mean a loss.<\/span><\/p>\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t<div class=\"elementor-element elementor-element-b6035a0 e-flex e-con-boxed e-con\" data-id=\"b6035a0\" data-element_type=\"container\" data-settings=\"{&quot;content_width&quot;:&quot;boxed&quot;}\">\n\t\t\t\t\t<div class=\"e-con-inner\">\n\t\t\t\t<div class=\"elementor-element elementor-element-16e2366 elementor-widget elementor-widget-heading\" data-id=\"16e2366\" data-element_type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t<h3 class=\"elementor-heading-title elementor-size-default\">How is it a Tool for Decision Making?<\/h3>\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-f927153 elementor-widget elementor-widget-text-editor\" data-id=\"f927153\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t<p><span style=\"font-weight: 400;\">The weighted average helps determine whether it&#8217;s wise to act on a particular situation. Thus, it serves as <\/span><b>an essential analytical tool<\/b><span style=\"font-weight: 400;\"> not to be missed.<\/span><\/p>\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-7e9d2d6 elementor-align-center button-principal elementor-widget elementor-widget-button\" data-id=\"7e9d2d6\" data-element_type=\"widget\" data-widget_type=\"button.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<div class=\"elementor-button-wrapper\">\n\t\t\t<a class=\"elementor-button elementor-button-link elementor-size-sm\" href=\"https:\/\/datascientest.com\/en\/\">\n\t\t\t\t\t\t<span class=\"elementor-button-content-wrapper\">\n\t\t\t\t\t\t<span class=\"elementor-button-text\">Discover DataScientest<\/span>\n\t\t<\/span>\n\t\t\t\t\t<\/a>\n\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t<div class=\"elementor-element elementor-element-e39f95a e-flex e-con-boxed e-con\" data-id=\"e39f95a\" data-element_type=\"container\" data-settings=\"{&quot;content_width&quot;:&quot;boxed&quot;}\">\n\t\t\t\t\t<div class=\"e-con-inner\">\n\t\t\t\t<div class=\"elementor-element elementor-element-8106e84 elementor-widget elementor-widget-html\" data-id=\"8106e84\" data-element_type=\"widget\" data-widget_type=\"html.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t<script type=\"application\/ld+json\">\r\n{\r\n  \"@context\": \"https:\/\/schema.org\",\r\n  \"@type\": \"FAQPage\",\r\n  \"mainEntity\": [\r\n    {\r\n      \"@type\": \"Question\",\r\n      \"name\": \"What is a weighted average?\",\r\n      \"acceptedAnswer\": {\r\n        \"@type\": \"Answer\",\r\n        \"text\": \"A weighted average is a statistical measure that takes into account the relative importance of each value. Each value is multiplied by a specific weight, and the sum of the products is divided by the sum of the weights.\"\r\n      }\r\n    },\r\n    {\r\n      \"@type\": \"Question\",\r\n      \"name\": \"How do you calculate a weighted average?\",\r\n      \"acceptedAnswer\": {\r\n        \"@type\": \"Answer\",\r\n        \"text\": \"To calculate a weighted average, multiply each value by its corresponding weight, then add up the results. Finally, divide the sum by the total sum of the weights. The formula is: Weighted Average = (\u03a3 (value \u00d7 weight)) \/ \u03a3 weight.\"\r\n      }\r\n    },\r\n    {\r\n      \"@type\": \"Question\",\r\n      \"name\": \"In which fields is the weighted average used?\",\r\n      \"acceptedAnswer\": {\r\n        \"@type\": \"Answer\",\r\n        \"text\": \"The weighted average is used in various fields, such as statistics, finance (calculating returns), education (calculating grades), and any context where certain values have greater importance than others.\"\r\n      }\r\n    },\r\n    {\r\n      \"@type\": \"Question\",\r\n      \"name\": \"What is the difference between a simple average and a weighted average?\",\r\n      \"acceptedAnswer\": {\r\n        \"@type\": \"Answer\",\r\n        \"text\": \"A simple average assigns the same weight to all values, whereas a weighted average assigns different weights to each value based on their relative importance.\"\r\n      }\r\n    }\r\n  ]\r\n}\r\n<\/script>\r\n\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"<p>When used for analytical purposes, calculating a simple average can be misleading. By applying weights to certain numbers in a list, you can achieve a much more precise understanding. Not all information has the same level of importance, and any insightful analysis of a sector needs to account for this factor. Relying on straightforward formulas [&hellip;]<\/p>\n","protected":false},"author":45,"featured_media":192849,"comment_status":"open","ping_status":"open","sticky":false,"template":"elementor_theme","format":"standard","meta":{"content-type":"","inline_featured_image":false},"categories":[2425],"tags":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v21.7 (Yoast SEO v21.7) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Weighted average: What is it? 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