3. Time-weighted average price (TWAP) is a performance measure where child orders are spread uniformly over a given time interval, while Volume-weighted average price (VWAP) is a very popular benchmark method to quantify execution performance. If an asset during some time interval has N trades with price p and volume Uk, its VWAP is N N VWAP = UK.PK/ Uk k=1 k=1 (2) Jeremy is a trader and he was asked to sell 20, 000 shares of AAPL stock. He finished his typical 6 hours trading day with the following trading records in a spreadsheet: Period (k) 1 2 3 4 5 6 Volume (V) 1000 1500 1100 2400 2400 2000 Price (P) 59.90 38.49 44.12 67.50 66.30 160.32 Each of the six periods is one hour. a). Please calculate both VWAP and TWAP (hint: a simple average for the six periods is TWAP). (6 pts) b). What is the difference and why traders would prefer to use VWAP? (4 pts)