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

Net Asset Value (NAV)

The value of a company's assets relative to the number of shares it has.
Read more

Quantitative easing

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

Maturity date

The date on which a gilt is redeemed and the gilt holder receives the repayment of the nominal amount and final dividend or coupon payment.
Read more

Real Estate Investment Trust (REIT)

An investment trust specialised in investing in commercial property such as parking garages or GP offices.
Read more

Custodian bank

Learn what a custodian bank is.
Read more

NASDAQ

A US stock exchange specialising in the shares of technology companies.
Read more

Geometric Mean Return

A way of calculating compound returns on an investment or savings over a set period of time.
Read more

Rate of Return

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

Gilt

What is a gilt?
Read more

You’re just minutes away from commission-free investing

When you invest, your capital is at risk