# Average Price

## Average Price

1. A measure of how much an investor pays for each share of stock calculated by taking the prices one pays and dividing by the number of prices. For example, suppose one buys five shares of the same stock, paying $10, $11, $12, $13, and $14, respectively. The average price in this case is $12. See also: Average up, Average down.

2. A very rough measure of a bond's yield-to-maturity taken by adding the par value of the bond to the price the bondholder paid, and dividing by two. This is not always accurate, but it gives bondholders an approximate measure with little effort.

2. A very rough measure of a bond's yield-to-maturity taken by adding the par value of the bond to the price the bondholder paid, and dividing by two. This is not always accurate, but it gives bondholders an approximate measure with little effort.

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