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how to compute the geometric mean. Investors find the geometric mean value for their investments to get compounding return values. Using the same example as we did for the arithmetic mean the geometric mean calculation equals.
To demonstrate this the following DATA step simulates 100 random observations from a lognormal distribution. The geometric mean is also referred as the compounded annual growth rate as the average rate of return values are calculated based on the product of the terms. Geometric Mean 0275 10-9 88 103 242 10-6 00016 m.
This can be written as.
Another way to calculate the geometric mean is with logarithms as it is also the average of logarithmic values converted back to base 10. Check the box to report Geometric means. Geometric Mean a1 a2. Geometric Mean Product of 1 Rn 1n -1.