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

Stock Exchange

A physical/digital place where stockbrokers and traders can buy and sell securities.
Read more

Accrued interest

The interest earned on a gilt since the last dividend date. When buying a gilt, the buyer pays the accrued interest at the time of a transaction to the seller in addition to the clean price of the gilt
Read more

Forward pricing

Mutual funds are traded on a forward pricing basis, meaning the price you see will be different to the price you may trade at.
Read more

Capital

Learn what financial capital means
Read more

Bond

Learn what a bond is
Read more

Ponzi Scheme

A form of fraud designed to lure new investors, and pays the earlier backers by using the new investors' money.
Read more

Yield curve

A graphical representation of interest rates over time
Read more

Rate of Return

Profit on an investment, expressed as a percentage of the investment.
Read more

Income statement

A summary of a company's income and expenses over a set period of time.
Read more

You’re just minutes away from commission-free investing

When you invest, your capital is at risk