The resulting geometric mean, or a compounded annual growth rate (CAGR), is 20.6%, much lower than the 35% calculated using the arithmetic mean. Limitations of Using the Geometric Mean in Analysis ...

And yet, an actual $10,000 investment in the S&P 500 over this time would have grown to only $19,568.08. The fact that the first year’s return was 5.49% meant that by Year No. 2, there wasn’t ...

Multiply the result by 100%, and your portfolio returned a geometric mean of 3.99% over five years, slightly less than the arithmetic mean of (5+3+6+2+4) ÷ 5 = 4. Calculate the Geometric Mean in ...

The geometric mean return is another growth rate that when applied to the starting value over time produces the actual ending value. This gap between arithmetic and geometric returns is the ...

The comparison is between arithmetic or geometric mean returns. Returns themselves are neither arithmetic nor geometric. Follow us on Facebook , Instagram , Twitter , and LinkedIn !

Specialization: Data Science Foundations: Data Structures and Algorithms Instructor: Sriram Sankaranarayanan, Assistant Professor Prior knowledge needed: We highly recommended successfully completing ...