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

Unit Trusts

A collective investment scheme the investors pay money into in exchange for units. The money is invested in a diversified portfolio of assets.
Read more

Accounting standards

The rules a company follows when preparing financial statements.
Read more

United States Dollar (USD)

The famous greenback our friends in the US use as currency.
Read more

Money weighted rate of return

Learn what Money Weighted Rate of Return or MWRR stands for in finance.
Read more

Coupon

Also called a dividend, this is the fixed annual interest paid to gilt holders. It’s usually paid in two equal, semi-annual instalments and expressed as a percentage of the nominal value of the gilt.
Read more

Base rate

What's the base rate?
Read more

Inflation

The increase in the prices of goods and services over time, and the process by which money loses its value.
Read more

Yield

Income from an investment as a percentage of its current price.
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

You’re just minutes away from commission-free investing

When you invest, your capital is at risk