Arithmetic average

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Arithmetic average (mean) rate of return

Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
References in periodicals archive ?
Additionally, normalized weighted arithmetic averages (y) are calculated to be between 4.27% and 5.76%.
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6 and 7 draws plot of main factor effects on the arithmetic average roughness Ra and maximum peak-to-valley height [R.sub.t].
At Central Campoona the arithmetic average of the graphitic schist in the 6 holes completed to date (sample size n=72; xi 12.4%TGC) is 11-13%TGC.
(3) shows the averages and standard deviations of clauses on the strategic analysis domain, the arithmetic averages ranged between (3.25-3.10) compared to the general arithmetic average which amounted (3.12).The clause stating that "the planning team analyzes the interior environment of the school (weakness and strength points), occupied the first rank with an arithmetic average (3.25) and a standard deviation (0.91), while the clause "the planning team detects predictions of those who have interests from the school management within the strategic plan implementation period", recorded the fifth rank (which is the last), with an arithmetic average of (3.10) and standard deviation of (0.93).
[check] as a weighted arithmetic average, where the weights are the intervals between moments of times if these intervals are different:
2) Calculate the upper control limit, UCL and the lower control limit, LCL of the arithmetic average surface roughness [R.sub.a] and the surface roughness [R.sub.z], which are used in the I-MR charts.
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On the 21st trading day following the PDUFA date relating to the New Drug Application (NDA) for Biodel's product candidate, VIAject, the exercise price will be adjusted to 90% of the arithmetic average of the volume weighted average price of Biodel's common stock on each of the ten trading days prior to the 21st day following the PDUFA date.