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

Equity

The amount of money a company would be left with by subtracting its liabilities from the value of its assets.
Read more

UK Treasury bill

A debt instrument issued by the UK government with a maturity of less than one year.
Read more

Growth stocks

These are stocks in companies that are considered to be “growing”. These companies may be delivering new products and services, or entering new markets.
Read more

Volatility

A measure of how much the prices of an asset or index vary over time.
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

Key Information Document (KID)

A document issued by an investment fund to help investors determine if it's the right fund for them.
Read more

Net asset value

Mutual funds and investment trusts are priced on their net asset value (NAV).
Read more

Hypothesis Testing

A mathematical test used to determine whether a claim is true or false.
Read more

Stock Exchange

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

You’re just minutes away from commission-free investing

When you invest, your capital is at risk