Economics · Financial Markets
Consider the following statements regarding the Volume-Weighted Average Price (VWAP): Statement I: VWAP helps institutional investors compare current market price with a volume-weighted benchmark, aiding in better trading decisions. Statement II: VWAP is a static metric calculated at the end of the week using closing prices only. Statement III: VWAP is useful for minimizing market impact when trading large volumes of stock. Which one of the following is correct in respect of the above statements?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Neither Statement II nor Statement III is correct.
- 2Only one of the Statements II and III is correct, and that explains Statement I.✓
- 3Both Statement II and Statement III are correct, but only one of them explains Statement I.
- 4Both Statement II and Statement III are correct, and both of them explain Statement I.
Correct answer
Only one of the Statements II and III is correct, and that explains Statement I.
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