The Exposure Factor is a very important factor in calculating the value of an asset. It has to do with how often and for how long your investment is exposed to risk. By multiplying the asset’s value by its exposure factor, you can calculate which of the following?
The number of shares (or other units) that would be purchased if one share was bought at the beginning of each period during some time interval
For example: If someone invests $100 per week into stocks over six months, he or she will have invested 60 times their original $100 initial investment ($600 total). Therefore, his or her stock account will contain 600 shares.
At this point, they need only multiply 100 shares by their average purchase price and by the number of shares they now have in their account ($100 per share x 100 shares = $100,00).
This can also be used to work backwards. If you want to know what your investment would have been worth if it was invested at a higher rate over a shorter time period, simply divide your total dollars by the amount of money that should be put into an asset for each transaction and then multiply this result by the number of transactions.
Here is an example: Let’s say someone has saved up $200 but wants to invest only 100% instead of 50%. They will need 20 times more than originally planned (20×100=200) so they must save double as much money every week and invest it all in one.