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Question 22 of 71

Q.(e) Explain weighted arithmetic mean.

ChseodishaCHSE Odisha Plus Two (Class 12) Commerce Board 2019Subjective· 3mImportance★★★★★
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The weighted arithmetic mean averages values after multiplying each by a weight reflecting its importance: xˉw=∑wx∑w\bar{x}_w = \dfrac{\sum wx}{\sum w}.

In a simple arithmetic mean every observation is treated as equally important. But often some items matter more than others (e.g. different expenditure heads in a cost-of-living index). In such cases we attach a weight wiw_i to each value xix_i showing its relative importance, and compute the weighted arithmetic mean:

xˉw=w1x1+w2x2+⋯+wnxnw1+w2+⋯+wn=∑wx∑w.\bar{x}_w = \frac{w_1x_1 + w_2x_2 + \cdots + w_nx_n}{w_1 + w_2 + \cdots + w_n} = \frac{\sum wx}{\sum w}.

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