It is calculated as. Geometric mean is the average rate of return of a set of values calculated using the products of the terms. The formula for the geometric mean return is used specifically for investments that are compounded.
The geometric mean can be used to calculate average rates of return in finances or show how much something has grown over a specific period of time.
Geometric mean is the average rate of return of a set of values calculated using the products of the terms. We would just sum the numbers 1 5 10 13 30 and then divide by 5 giving us an arithmetic mean of 1180. Geometric Mean Return Formula r rate of return n number of periods. Using the sample numbers above 2000 1000 1 5 - 1 2 02 - 1 and.