As a mathematical rule, the geometric mean will always be equal to or less than the arithmetic mean. However, the true return is as follows: Year 1: $100 x 1.10 = $110.00 ...

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 ...