




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


 