average life(redirected from Mean Life)
Also found in: Dictionary, Medical, Acronyms, Encyclopedia, Wikipedia.
Also referred to as the weighted-average life (WAL). The average number of years that each dollar of unpaid principal due on the mortgage remains outstanding. Average life is computed as the weighted-average time to the receipt of all future cash flows, using as the weights the dollar amounts of the principal paydowns.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.
Weighted Average Life
The amount of time for the principal on a loan or a mortgage to be paid off. The length of the weighted average life depends on the amount of principal paydowns and how often they are made. Once the WAL is calculated, one can determine how long it will take to pay off half of the remaining principal.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.