# averaging

Also found in: Dictionary, Thesaurus, Medical, Legal, Idioms, Encyclopedia.
Related to averaging: signal averaging, Averaging Down

## 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.

## averaging

References in periodicals archive ?
Given the fact that the price of a security always fluctuates, dollar-cost averaging guarantees that your cost basis will always be lower than the average price per share.
Similarly, Free Independent Travelers (FIT) rates increased from an average of \$133 per room night in July to an average of \$163 in August and is presently averaging \$162 in September month to date.
Overall, Tim Nunnery is averaging 19 points per game, Wendell is averaging 15 points per game, and Mertes is averaging 14.

Site: Follow: Share:
Open / Close