In Malay, the expression for the mean is sama rata, which roughly translates as “same level.” To understand this cultural and conceptual connection, take some poker chips (or other equal-sized, stackable objects) and make stacks with 3, 7, and 8 chips.
(a) Explain how to redistribute chips among the stacks until they are at the same level.
(b) How does this relate to the mean?
(c) If a stock gains 50 percent one year and then loses 50 percent of its value the next year, is it accurate to say that its mean growth over the full two-year period was (50 + −50)/2 = 0%? Explain.

  • CreatedAugust 05, 2013
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