DEFINITION of 'Average Price'
1. A representative measure of a range of prices that is calculated by taking the sum of the values and dividing it by the number of prices being examined. The average price reduces the range into a single value, which can then be compared to any point to determine if the value is higher or lower than what would be expected.
2. A bond's average price is calculated by adding its face value to the price paid for it and dividing the sum by two. The average price is sometimes used in determining a bond's yield to maturity where the average price replaces the purchase price in the yield to maturity calculation.
INVESTOPEDIA EXPLAINS 'Average Price'
1. In situations where there is a range of prices it can be useful to calculate the average price to simplify a range of numbers into a single value. For example, if over a fourmonth period you paid $104, $105, $110, and $115 for your utilities, the average price or cost of your monthly utilities would be $108.50.
2. Although the average price of a bond is not the most accurate method to find its YTM, it does give investors a rough and simple gauge to find out what a bond is worth.

Moving Average  MA
A widely used indicator in technical analysis that helps smooth ... 
Yield To Maturity (YTM)
The rate of return anticipated on a bond if held until the maturity ... 
Face Value
The nominal value or dollar value of a security stated by the ... 
Mean
The simple mathematical average of a set of two or more numbers. ... 
Geometric Mean
The average of a set of products, the calculation of which is ... 
Accrued Interest
1. A term used to describe an accrual accounting method when ...

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