Arithmetic Mean


DEFINITION of 'Arithmetic Mean'

A mathematical representation of the typical value of a series of numbers, computed as the sum of all the numbers in the series divided by the count of all numbers in the series.

Arithmetic mean is commonly referred to as "average" or simply as "mean".


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BREAKING DOWN 'Arithmetic Mean'

Suppose you wanted to know what the arithmetic mean of a stock's closing price was over the past week. If during the five-day week the stock closed at $14.50, $14.80, $15.20, $15.50, and then $14.00, its arithmetic mean closing price would be equal to the sum of the five numbers ($74.00) divided by five, or $14.80.

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