You are examining a group of 20 mutual funds. You find that 5 have an 8% position in foreign stocks, 7 have a 9% position in foreign stocks, and 8 have no position in foreign stocks. What is the weighted average position in foreign stocks of these 20 mutual funds?
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A. B. C. D.D
A weighted-average is equal to the sum (as i goes from 1 to n) of w_i * X_i, where w_i is the percentage weight of the ith item, and X_i is the value of the ith item.
Here, we get a weighted mean of 5/20 * 0.08 + 7/20 * 0.09 + 8/20 * 0 = 5.15%.