Geometric mean vs arithmetic mean
Arithmetic Mean (%)
Geometric Mean (%)
“The difference between the geometric mean returns of the two funds (2.24%) is greater than the difference between the arithmetic mean returns of the two funds (1.67%). How should the analyst interpret these results?”
Taken directly from reading 8 - the paragraph after describes that geometric is compound growth.
I do understand that the larger the difference between the SLASX Arithmetic and geometric means the greater the variability.
Not clear about the significance of “greater variability between: arithmetic mean of two different samples vs geometric mean of two different samples”.
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