/

Arithmetic Mean

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

Margin call

Learn what a margin call stands for in financial terms.

S&P 500

Find out what is the definition of the S&P 500 index.

Diversification

An investment strategy in which money is put into a variety assets.

SPAC

Find our what a SPAc or special purpose acquisition company is.

United States Dollar (USD)

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

Value Investing

The art of buying shares which trade below their value, according to the analysis of the value investor.

American Depository Receipt (ADRs)

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

Earnings per share

We look at what earnings per share mean and how to calculate it

Quick ratio

Learn what quick ratio stands for in financial terms and how to calculate it.

You’re just minutes away from commission-free investing

When you invest, your capital is at risk

Freetrade does not provide investment advice and individual investors should make their own decisions or seek professional advice. The value of investments can go down as well as up and you may receive back less than your original investment. Freetrade is a trading name of Freetrade Limited, which is a member firm of the London Stock Exchange and is authorised and regulated by the Financial Conduct Authority. Registered in England and Wales (no. 09797821).

© 2025 Freetrade, All rights reserved. The Apple logo is a trademark of Apple Inc. App Store is a service mark of Apple Inc. Google Play and the Google Play logo are trademarks of Google LLC.