Can you provide an example of how the weighted average and the average are calculated for a specific cryptocurrency?

3 answers

• Dec 26, 2021 · 3 years ago
  Sure! When calculating the weighted average for a specific cryptocurrency, you take into account the different weights assigned to each price point. For example, if there are multiple exchanges where the cryptocurrency is traded, you would assign a weight to each exchange based on its trading volume or liquidity. Then, you multiply each price by its corresponding weight, sum up the results, and divide by the total weight. This gives you the weighted average price. On the other hand, when calculating the average price, you simply sum up all the prices and divide by the total number of prices. The weighted average takes into consideration the importance of each price point, while the average treats all prices equally. Hope that helps! 😊
  745373
• Dec 26, 2021 · 3 years ago
  Sure thing! Calculating the weighted average and the average for a specific cryptocurrency involves different approaches. The weighted average considers the significance of each price point by assigning weights based on factors like trading volume or liquidity. This ensures that prices with higher trading activity have a greater impact on the overall average. On the other hand, the average calculates the mean price by summing up all the prices and dividing by the total number of prices. It treats each price equally, regardless of its trading volume or liquidity. So, the weighted average gives more importance to influential prices, while the average treats all prices equally. I hope this clarifies the difference between the two calculations! 👍
  753251
• Dec 26, 2021 · 3 years ago
  Certainly! Let me break it down for you. When calculating the weighted average for a specific cryptocurrency, you assign weights to each price point based on certain criteria such as trading volume or market capitalization. These weights reflect the importance or significance of each price point in the overall calculation. Then, you multiply each price by its corresponding weight, sum up the results, and divide by the total weight. This gives you the weighted average. On the other hand, the average is calculated by simply summing up all the prices and dividing by the total number of prices. It treats each price equally, without considering any specific criteria. So, the weighted average takes into account the importance of each price point, while the average treats all prices equally. I hope this explanation helps! 😊
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