The main difference between Arithmetic Mean and Geometric Mean is as follow:

Numbers used in calculation of Arithmetic Mean are independent of each other, such as Students grade of a class, But The Numbers used in calculation of Geometric Mean depend on each other, such as Returns of a Portfolio over no. of years.

The following are the returns of a Portfolio over last 5 years:

Yr	Return
1	40%
2	20%
3	-30%
4	15%
5	25%

Arithmetic Mean of this Portfolio is 14%. But, the Geometric Average, a real measure of Return is approximately:.

	a.	41.0%
	b.	8.5%
	c.	11.1%
	d.	22.0%
	e.	16.3%
	f.	9.0%