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

Money laundering

A method of moving money obtained illicitly through the financial system so it can be used legally.
Read more

Holding Period Return

The amount of money generated by an asset during the time that it was held by an investor..
Read more

DMO

The United Kingdom Debt Management Office. It’s an executive agency responsible for managing the government’s debt and cash needs, primarily through issuing gilts and Treasury bills.
Read more

Hedge Fund

Investment funds that are often associated with riskier and shorter-term trading strategies.
Read more

Total Return

This is the measurement of a fund’s performance in a specific period.
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

Custodian bank

Learn what a custodian bank is.
Read more

Dirty price

The total price payable on the purchase of a gilt. It’s calculated as the clean price plus accrued interest.
Read more

Arithmetic Mean

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

You’re just minutes away from commission-free investing

When you invest, your capital is at risk