




The arithmetic mean of a set of two or more values is the sum of all the values divided by the number of values. In mathematics and statistics the arithmetic mean is one type of average, or measure of central tendency, but school children are taught to call the arithmetic mean "the average." Because the arithmetic mean is a fundamental measure, it has application in numerous business contexts. Accordingly, the average usually means the arithmetic mean, and an arithmetic mean is generally called an average. For instance, in real estate one key measure of the state of the market is the average number of days on the market for properties for sale. Although this measure would be technically described as the "arithmetic mean of number of days on the market," average days on the market is both simpler to say and widely understood. The term arithmetic mean is infrequently used in place of average, except where technical precision is required.
Rate this arithmetic mean definition...




Where is the market headed? The answer may surprise you. Find out with the exclusive & Barron's recommended charts of Chart of the Day. 

Popular Terms: implied volatility, EBITDA, APR, liquidity ratio, labor relations, VIX, current ratio, 1031 exchange, balance sheet, exdividend, FTSE, risk management, Zero Cost Collar, retained earnings, dividends payable, stock market close, phantom income, diluted share, debt service coverage, required rate of return, 1035 exchange, command economy, inflation, 144a, real GDP, annual return, limit order, deferred tax, stock split, 401a, whollyowned subsidiary, margin rate, class C shares, option premium, in escrow, open position, deferred revenue, Key Rate Duration, minority interest, per diem, exdividend date, covered put, reverse mortgage, cancelled check, average price per share, FICO score, quality assurance, LIBOR, irrevocable trust


 