




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


 