Enter the total monetary amount invested in a mutual fund and the total number of shares owned to calculate the average cost basis.
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Average Cost Basis Formula
The following formula is used to calculate an average cost basis.
ACB = TI / S
- Where ACB is the average cost basis
- TI is the total amount invested in the mutual fund
- S is the total number of shares owned
Average Cost Basis Definition
An average cost basis is defined as the average cost of a fund or stock per share of the fund owned. That is the amount you paid per share on average.
Average Cost Basis Example
How to calculate an average cost basis?
- First, determine the total amount invested.
Calculate the total amount invested over time.
- Next, determine the number of shares.
Calculate the total number of shares currently owned.
- Finally, calculate the average cost basis.
Using the equation above, calculate the average cost basis.
A cost basis is defined as the total cost including fees that were used to purchase a security.