If you use an arithmetic average to project long-run wealth levels, your results will most likely be optimistic. The arithmetic mean is the simplest and most commonly used measure of the average or mean. It simply involves taking the sum of a group of numbers, then dividing that sum by the count of the numbers used in the series.
The arithmetic mean, also called the arithmetic average, is a quantity obtained by summing two or more numbers or variables and then dividing by the number of numbers or variables. Arithmetic mean is important in statistics.
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