Discover why investors prefer the geometric mean for assessing portfolio performance due to its compounding effect, and learn how it differs from the arithmetic mean.

The simple definition of a mean is that of a numeric quantity which represents the center of a collection of numbers. Here the trick lies in defining the exact type of numeric collection, as beyond ...

This is my second blog on mean, mode and median in just a week – surely that’s far from average. However, I’ve just been reading about the differences between the arithmetic mean and the geometric ...

In the investment world, it’s common to discuss average rates of return. It’s not sufficient, however, to simply add up historical returns and divide by how many there are. The proper way to calculate ...

A. M. Fink and Max Jodeit, Jr. It is shown that the arithmetic mean of $x_1 w_1,\ldots, x_n w_n$ exceeds the geometric mean of $x_1,\ldots, x_n$ unless all the $x$'s ...