The weighted average loan age (WALA) is a measure of the average age of a bank's loan portfolio. The weighted average is calculated by weighting each loan by its outstanding balance.
The WALA is important because it provides insight into the average credit risk of a bank's loan portfolio. A higher WALA indicates a greater average credit risk, as loans that are older are more likely to go into default.
The WALA can be used to compare the credit risk of different banks, as well as to compare the credit risk of a bank over time.
What do we call wala?
There is no one definitive answer to this question. "Wala" can refer to any number of things, depending on the context in which it is used. For example, "wala" could refer to a financial analyst who specializes in fundamental analysis, or it could refer to a tool used in fundamental analysis (such as a financial statement).
How do you calculate WAL in Excel?
To calculate WAL in Excel, you will need to use the following formulas:
For the WAL formula itself:
WAL = (PV + FV + DIV) / (PV + FV)
PV = Present Value
FV = Future Value
DIV = Dividend
For the Present Value (PV) formula:
PV = FV / (1 + r)^t
FV = Future Value
r = Interest Rate
t = Number of Periods
For the Future Value (FV) formula:
FV = PV * (1 + r)^t
PV = Present Value
r = Interest Rate
t = Number of Periods
For the Dividend (DIV) formula:
DIV = D * (1 + g)^t
D = Dividend Per Share
g = Dividend Growth Rate
t = Number of Periods
What is the difference between duration and weighted average life?
Duration and weighted average life are two measures of bond price sensitivity to changes in interest rates. Duration is a measure of a bond's price sensitivity to changes in interest rates in general, while weighted average life is a measure of a bond's price sensitivity to changes in interest rates specifically at the time of the bond's maturity.
Duration is calculated by taking the present value of all future cash flows from the bond and then dividing by the bond's current price. This number represents the number of years it would take for the bond's price to return to its current level if interest rates were to increase by 1%.
Weighted average life is calculated by taking the present value of all future cash flows from the bond and then dividing by the bond's current price. This number represents the average number of years it would take for the bond's price to return to its current level if interest rates were to increase by 1% at the time of the bond's maturity.
How do I do a weighted average in Excel?
There are a few different ways to calculate a weighted average in Excel, depending on the data you have and how you want to weight the data points.
If you have a list of data points and corresponding weights, you can use the SUMPRODUCT function to calculate the weighted average. For example, if your data is in cells A1:A5 and the corresponding weights are in cells B1:B5, you would use the following formula:
=SUMPRODUCT(A1:A5,B1:B5)/SUM(B1:B5)
If you have a list of data points and want to weight them according to their position in the list (i.e. the first data point is given the highest weight, the second data point is given the second highest weight, etc.), you can use the SUMPRODUCT and ROW functions. For example, if your data is in cells A1:A5, you would use the following formula:
=SUMPRODUCT(A1:A5,ROW(A1:A5))/SUM(ROW(A1:A5))
If you have a list of data points and want to weight them according to a custom weighting scheme, you can use the SUMPRODUCT function. For example, if your data is in cells A1:A5 and you want to weight the data points according to the following scheme:
Data point 1: 2
Data point 2: 3
Data point 3: 1
Data point 4: 4
Data point 5: 5
You would use the following formula:
=SUMPRODUCT(A1:A5,{2,3,1,4,5})/SUM({2,3,1,4,5})
How is weighted average yield calculated?
Weighted average yield is a measure of the average yield of a group of securities with different weights assigned to each security according to its market value. The weights are typically assigned according to the market value of the security, but they can also be assigned according to other factors such as the interest rate of the security or the credit rating of the issuer.
To calculate the weighted average yield, the yields of the individual securities are first calculated. The individual yields are then multiplied by the weights assigned to each security and the products are summed. The weighted average yield is then calculated by dividing the sum of the products by the sum of the weights.
For example, consider a group of securities with the following market values and yields:
Security 1: $100,000, 5% yield
Security 2: $200,000, 6% yield
Security 3: $300,000, 7% yield
If the weights are assigned according to market value, then the weighted average yield would be calculated as follows:
Weighted average yield = ((5% x $100,000) + (6% x $200,000) + (7% x $300,000)) / ($100,000 + $200,000 + $300,000)
Weighted average yield = (5 + 12 + 21) / 600,000
Weighted average yield = 38 / 600,000
Weighted average yield = 0.063, or 6.3%