# harmonic mean

formula == 12 seconds bonus question: what is the MAD (deviation-related) formula – 10 seconds

it is N / E(1/Xi) for i = 1 to N… THe better question is when do you use harmonic mean. That I do not know, maybe you can help with that?

Harmonic mean is used when u wanna determine average price of shares purchased (I think?) MAD = E |xi-xbar|/n

topher Wrote: ------------------------------------------------------- > Harmonic mean is used when u wanna determine > average price of shares purchased (I think?) > > MAD = E |xi-xbar|/n That is correct. or if you wanna find out average time it’ll take for two bees working together at a difference pace to finish a job.

Harmonic mean is not contained in Schweser Secret Sauce, which leads me to believe that arithmetic mean and geometric mean are much more likely to be tested.

It is part of the quick sheet though. If it is not in SS, it still is fair game.

1. Gotta be careful with this E thing. MAD = E |xi-xbar|/n is not right. It’s either MAD = E |xi-xbar| or MAD = Sum |xi-xbar|/n 2) The only thing I can think of for the harmonic mean in finance is te dollar-cost averaging average share price. If you buy \$1000 worth of stock every month at 3, 4, 5, 6 then your average price per share is the harmonic mean of 3,…,6