/

Arithmetic Mean

Arithmetic Mean

The sum of a set of numbers added together and then divided by the total amount of numbers in that set.

‘Arithmetic mean’ is a fancy way of saying ‘mean’ or ‘average.’

To find the arithmetic mean, you add together a set of numbers and then divide your answer by the amount of numbers you had in that original set.

This may sound wordy - especially for math-o-phobes - but it’s really simple.

Take 1,2,3,4,5 as a set of numbers.

1+2+3+4+5 =15

In our original set, there were 5 numbers. So to get the average we just do….

15 ÷ 5 = 3

Simples.

More terms

Beta

Learn what Beta stands for in finance.

Margin call

Learn what a margin call stands for in financial terms.

Base rate

What's the base rate?

Wall Street

A street in New York that became a figure of speech for the financial markets of the US.

Maturity value

What's the maturity value of a bond?

Quantitative easing

Find out what quantitative easing is and how central banks use this monetary measure to encourage economic growth.

Investment Return

The amount of money made or lost from an investment. Usually expressed as a percentage.

Spot Rate

The currency exchange rate a bank quotes, valid with immediate effect.

After-hours trading

Trading outside of a stock exchange's opening hours.

You’re just minutes away from commission-free investing

When you invest, your capital is at risk

Freetrade does not provide investment advice and individual investors should make their own decisions or seek professional advice. The value of investments can go down as well as up and you may receive back less than your original investment. Freetrade is a trading name of Freetrade Limited, which is a member firm of the London Stock Exchange and is authorised and regulated by the Financial Conduct Authority. Registered in England and Wales (no. 09797821).

© 2025 Freetrade, All rights reserved. The Apple logo is a trademark of Apple Inc. App Store is a service mark of Apple Inc. Google Play and the Google Play logo are trademarks of Google LLC.