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how to calculate geometric mean and arithmetic mean. 5th Square Root of 1 005 1 01 1 02 1 05 1 02. Using the same example as we did for the arithmetic mean the geometric mean calculation equals.
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To calculate the geometric mean we take their product. Arithmetic mean return is a simpler and less accurate method because it doesnt take compounding into account. Its calculated by dividing the sum of returns for each period by the total number of periods.
The geometric mean is well defined only for sets of positive real numbers.
Hence the Geomean of 30000 and 33000 is calculated as. Geometric Mean is a kind of average of a set of numbers that is different from the arithmetic average. To get the Geometric Mean it is not so straight forward. One method is to calculate the arithmetic mean.
