Hey guys, Each month of 2009, abi purchases 10 shares of xyz stock. Given that the average price for each month is different, in order to calculate the average cost of all his purchases. Abi can most likely: A. use the weighted mean but not harmonic B. Use harmonic but not weighted C. Use either harmonic or the weighted mean I thought B. the harmonic mean but apparently not Can someone clarify? Thks
Harmonic mean is really a weighted mean with weight of each observation inversely proportional to its magnitude.
I think you would use the harmonic mean if he would be investing the same amount each month.
Answer must be A for the reason mentioned above but I was saying that Harmonic mean is a special case of weighted mean. Elan used the generalized assumption that weighted mean really implies arithmetic mean.