DEFINITION of '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 product of 'n' numbers", the formula for calculating geometric mean is most easily written as:
Where 'n' represents the number of returns in the series.
The geometric mean must be used when working with percentages (which are derived from values), whereas the standard arithmetic mean will work with the values themselves.
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What are some examples of applications of the geometric mean?
In statistics, the geometric mean is calculated by raising the product of series of numbers to the inverse of the total length ... Read Full Answer >> 
What is a geometric mean in statistics?
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How do you calculate the geometric mean to assess portfolio performance?
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