Arithmetic Mean

Dictionary Says

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".
Investopedia Says

Investopedia explains '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.

Related Definitions

  • Mode

    A statistical term that refers to the most frequently occurring number found in a set of numbers. The mode is found by collecting and organizing the data in order to count the frequency ...
    Read More »
  • Harmonic Average

    The mean of a set of positive variables. Calculated by dividing the number of observations by the reciprocal of each number in the series. Also known as "harmonic mean".
    Read More »
  • Mean

    The simple mathematical average of a set of two or more numbers. The mean for a given set of numbers can be computed in more than one way, including the arithmetic mean method, which ...
    Read More »
    • Winsorized Mean

      A method of averaging that initially replaces the smallest and largest values with the observations closest to them. After replacing the values, a simple arithmetic averaging formula is ...
      Read More »
    • Simple Moving Average - SMA

      A simple, or arithmetic, moving average that is calculated by adding the closing price of the security for a number of time periods and then dividing this total by the number of time ...
      Read More »
    • Moving Average - MA

      An indicator frequently used in technical analysis showing the average value of a security's price over a set period. Moving averages are generally used to measure momentum and define ...
      Read More »
    • Arithmetic Index

      An index of securities that uses an arithmetic sum to determine changes in the index without taking the relative size of the securities into account. An arithmetic index of stocks does ...
      Read More »
    • Unweighted Index

      A simple arithmetic or geometric average used to calculate stock indexes. Equal weight is invested in each of the stocks in an index with equal dollar amounts invested in each underlying ...
      Read More »
    • Geometric Mean

      The average of a set of products, the calculation of which is commonly used to determine the performance results of an investment or portfolio. Technically defined as "the 'n'th root ...
      Read More »
    • Trimmed Mean

      A method of averaging that removes a small percentage of the largest and smallest values before calculating the mean. After removing the specified observations, the trimmed mean is found ...
      Read More »

Articles Of Interest

Partner Links