/

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

Investment Trust

A company that pools money together from multiple investors and then invests it.

Retail Prices Index (RPI)

An index published each month by the Office for National Statistics, which measures the level of retail prices in the UK. Cash flows on all index-linked gilts are linked to the RPI.

Unicorn

A startup valued at over £1 billion. They are rare, hence the name.

Packaged Retail and Insurance-based Investment Product (PRIIP)

An investment where, regardless of its legal form, the amount repayable to the retail investor is subject to fluctuations.

Xetra

A trading venue operated by the Frankfurt Stock Exchange.

Base rate

What's the base rate?

Ponzi Scheme

A form of fraud designed to lure new investors, and pays the earlier backers by using the new investors' money.

SPAC

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

52-week high/low

The highest, or lowest, price a share has traded at in a passing year.

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.