Arithmetic average

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Arithmetic average (mean) rate of return

Arithmetic Mean Average

An average calculated by adding the value of the points in a data set and dividing the sum by the number of data points. For example, suppose one wishes to calculate the average income of a country with exactly five people in it, and their incomes are $25,000, $26,000, $43,000, $70,000, and $72,000. It is calculated as:

($25,000 + $26,000 + $43,000 + $70,000 + $72,000) / 5 = $47,200.

A limitation to the arithmetic mean average is that it can be overly affected by extremes in either direction. For example, if one of the five persons in the country earns $100 billion per year, the arithmetic mean average income would be in the billions and would not accurately count the other four citizens. For this reason, many analysts use the median in conjunction with the arithmetic mean average. The arithmetic mean average is also called simply the mean.
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To answer this question, arithmetic averages and standard deviations were calculated for each domain of the tool measuring the degree of applying strategic planning in public high schools, as a management development method, as seen by directors of education directorates, departments' heads, and educational supervisors.
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Brealey and Myers (1991) argue that if monthly returns are identically and independently distributed, then the arithmetic average of monthly returns should be used to estimate the long-run expected return.
The mean or arithmetic average prices, which are more responsive to higher priced sales, followed the same general pattern.
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In other words, statistically, if the arithmetic average varies over time so, too, will the standard deviation.
A third alternative is to estimate the model with the rate of change in the arithmetic average value of the market and risk-free assets: [16] [Mathematical Expression Omitted] where [Mathematical Expression Omitted].
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