The standard deviation is a measure that indicates the extent to which the peaks and troughs of a wave differ on average from the mean voltage. A large standard deviation is a measure of large amplitude waves, i.e., on average the peaks and troughs differ by a large extent from the mean voltage.
The weighted average formula is used to calculate the average value of a particular set of numbers with different levels of relevance. The relevance of each number is called its weight. The weights should be represented as a percentage of the total relevancy. Therefore, all weights should be equal to 100%, or 1.
The most important reason an investor should know how to calculate weighted average is that it can be used to calculate the weighted average cost of capital, or WACC, and the expected return on a stock.Using WACC to your advantageAs a long-term investor, you expect the business you are buying to generate a return.he most important reason an investor should know how to calculate weighted average is that it can be used to calculate the weighted average cost of capital, or WACC, and the expected return on a stock.