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

Nominal amount

The face value of a gilt. It represents the amount that will be repaid to the holder at maturity and is also used to calculate the dividend or coupon payment.
Read more

Gross Margin

The difference between a company's revenue and the cost to produce its goods/services, divided by revenue.
Read more

Bond

Learn what a bond is
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

OEIC

Unique to the UK, these funds pool together money to invest from multiple investors.
Read more

American Depository Receipts (ADRs)

Tradeable assets that let Americans invest in overseas stocks using US laws and dollars.
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

Margin call

Learn what a margin call stands for in financial terms.
Read more

Exchange-Traded Fund (ETF)

A collection of investments, pooled into a single fund that can be bought and sold on a stock exchange.
Read more

You’re just minutes away from commission-free investing

When you invest, your capital is at risk