# Weighted average

From ACT Wiki

1. *Statistics*.

A weighted average is an average calculated using appropriate weighting factors, often market values.

For example, the weighted average of 10% and 3.6%, weighted by market values of $75m and $25m respectively, is:

(10% x $75m) + (3.6% x $25m) / ($75m + $25m)

= 8.4%

2. *Inventory accounting.*

A average valuation method using units of inventory as the weighting factors.