(a) Briefly compare the arithmetic mean with the geometric mean. Cite some cases where the geometric mean...
Question:
(a) Briefly compare the arithmetic mean with the geometric mean. Cite some cases where the geometric mean would be preferred.
(b) Use data given in Table 4.9 to calculate the arithmetic mean and the geometric mean of market rates of return during 1970–1990.
(c) Analyze the results which you obtained in part (b).
Table 4.9
Transcribed Image Text:
Year 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 Sum Rate of return -0.0656 0.2631 0.0446 0.0706 -0.0154 0.3411 0.2026 0.3101 0.2667 0.1953 -0.1014 -0.1304 -0.2337 0.2638 0.0899 0.0300 0.1362 0.0353 -0.3849 0.2345 1.5525
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a The arithmetic mean and the geometric mean are two different types of averages used to describe the central tendency of a set of numbers The arithmetic mean often simply called the mean is the sum o...View the full answer
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Related Book For
Statistics For Business And Financial Economics
ISBN: 9781461458975
3rd Edition
Authors: Cheng Few Lee , John C Lee , Alice C Lee
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