How do you calculate weighted average maturity?

How do you calculate weighted average maturity?

WAM is calculated by computing the percentage value of each mortgage or debt instrument in the portfolio. The number of months or years until the bond’s maturity is multiplied by each percentage, and the sum of the subtotals equals the weighted average maturity of the bonds in the portfolio.

What is the difference between WAM and WAL?

Weighted Average Life (WAL): WAL, as it applies to money market funds, is calculated in the same manner as the Weighted Average Maturity (WAM), but is based solely on the periods of time remaining until the securities held in the fund’s portfolio (a) are scheduled to be repaid or (b) would be repaid upon a demand by …

Why does the weighted average loan term differ from the weighted average remaining maturity?

(i) Why does the weighted average loan term differ from the weighted average remaining maturity? A weighted-average maturity (WAM) is found by weighting the remaining number of months to maturity for each mortgage loan in the pool by the amount of the mortgage outstanding.

How are Wal loans calculated?

The weights are the annual principal repayments. ($100 x 1) + ($400 x 2) + ($300 x 3) + ($200 x 4), or 2,600 dollar-years. Divide the weighted total by the bond face value to get the WAL. In this example, the WAL equals (2,600 dollar-years / $1,000) or 2.6 years.

How is weighted average interest calculated for fixed deposit?

How to Calculate the Weighted Average Interest Rate

1. Step 1: Multiply each loan balance by the corresponding interest rate.
2. Step 2: Add the products together.
3. Step 3: Divide the sum by the total debt.
4. Step 4: Round the result to the nearest 1/8th of a percentage point.

How is weighted average FICO score calculated?

Weighted Average FICO Score means, as of any date of determination, the sum of the weighted FICO Scores calculated for each FICO Score as follows: (i) the sum of the aggregate Outstanding Principal Balance of all Closed-End Assets owed by Obligors for such FICO Score, divided by the sum of the aggregate Outstanding …

What is weighted average mark WAM?

A Weighted Average Mark (WAM) is calculated based on results for all completed subjects within a diploma or degree, where results are out of 100. This includes subjects for which you gained a failing score or grade. Ignore any subjects for which there are no scores, or where only a non-scoring pass or fail is possible.

What is the difference between weighted average life and duration?

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).

What is weighted average remaining life?

The weighted average life (WAL) is the average length of time that each dollar of unpaid principal on a loan, a mortgage, or an amortizing bond remains outstanding.

How is weighted average life loan calculated?

To calculate the average life, multiply the date of each payment (expressed as a fraction of years or months) by the percentage of total principal that has been paid by that date, add the results, and divide by the total issue size. Then divide the weighted total by the bond face value to get the average life.

What is weighted average life of a loan?

How is weighted average interest calculated?

How do you calculate weight of weighted average maturity?

The WAM can be calculated by determining the weight of each maturity in the average, multiplying that weight by the security’s maturity, and summing the weighted maturities. The weight is the proportion of total portfolio value that each security represents.

What is a weighted average with negative weights?

Re: weighted average with negative weights. Mathematically, a weighted average is only defined for positive weights. The denominator of a weighted mean is the sum of the weights. If you attempt to introduce negative weights, all kinds of bad things can happen, such as the denominator being zero.

What happens if you introduce negative weights in a graph?

If you attempt to introduce negative weights, all kinds of bad things can happen, such as the denominator being zero. If the weights are w1=+1/2 and w2=-1/2, what is the weighted average of x1=1 and x2=2? Is it the same or different from the weighted average of x1=1 and x2=200?

What is the difference between weighted average loan age and WAM?

WAM is closely related to weighted average loan age (WALA). Weighted average maturity (WAM) is a measure of the overall maturity of the mortgages pooled in a mortgage-backed security (MBS). A longer WAM implies somewhat greater interest rate and credit risk than MBS with shorter WAMs.