Question 1

What is a Geometric Mean?

Accepted Answer

The geometric mean is the nth root of the product of n numbers. It is the correct average for quantities that multiply (growth rates, investment returns) rather than add.

Question 2

How does the Geometric Mean work?

Accepted Answer

GM = (x₁ × x₂ × ... × xₙ)^(1/n) Then: Always ≤ arithmetic mean Then: For investment returns: GM = (final/initial)^(1/n) − 1.

Question 3

Can you give an example of how to use the Geometric Mean?

Accepted Answer

Example: Input Annual returns: +50%, −50%, +50% gives a result of GM = (1.5×0.5×1.5)^(1/3)−1 = −6.1%/yr (AM would give +16.7% — completely misleading).

Question 4

Is the Geometric Mean free to use?

Accepted Answer

Yes — completely free with no registration, download, or subscription required. All calculations happen instantly in your browser.

Question 5

How accurate is the Geometric Mean?

Accepted Answer

Our Geometric Mean uses verified mathematical formulas and is accurate to multiple decimal places. Results are calculated in real-time using the same methods used by professionals.

Geometric Mean

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What is Geometric Mean?

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