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I just did a basic weighted average will you check my work?


I am trying to get the hang of this. This is a basic weighted average, I need to get this down pat before I do the time weighted average could you check this to tell me if I am correct? Thank you.

I have three investments their values are:
A. 46.5% Rate of return at 40% allocation
B. 30.7% Rate of return at 30% allocation
C. 63.5% Rate of return at 30% allocation

I took all of the numbers and added them as the numerator
then I took the percentages as the denominator and added them up. I came up with a 14.07 weighted average rate of return.
Thanks in advance for your help.

Lisa

Here is the basic weighted average calculation:

(46.5% x 0.4) + (30.7% x 0.3) + (63.5% x 0.3) = 46.86%

Always keep in mind that: Sum of % always equal 100% (that means you are taking everything into account).

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