Geometric Mean - Measures of Central Tendency, Business Mathematics & Statistics

Geometric Mean - Measures of Central Tendency, Business Mathematics & Statistics Video Lecture - Business Mathematics and Statistics - B Com

115 videos|142 docs

FAQs on Geometric Mean - Measures of Central Tendency, Business Mathematics & Statistics Video Lecture - Business Mathematics and Statistics - B Com

 1. What is the geometric mean and how is it calculated?
Ans. The geometric mean is a measure of central tendency used to find the average of a set of values that are exponentially increasing or decreasing. It is calculated by taking the nth root of the product of n values.
 2. When is the geometric mean used in business mathematics and statistics?
Ans. The geometric mean is commonly used in business mathematics and statistics when dealing with growth rates, investment returns, interest rates, and other variables that exhibit exponential growth or decay.
 3. How does the geometric mean differ from the arithmetic mean?
Ans. The arithmetic mean calculates the average by summing all the values and dividing by the total number of values, while the geometric mean calculates the average by multiplying all the values and taking the nth root of the product. The geometric mean is more suitable for data that has a multiplicative relationship.
 4. Can the geometric mean be negative or zero?
Ans. No, the geometric mean cannot be negative or zero. Since it involves taking the nth root, all values must be positive for the calculation to be valid. If there are any negative or zero values, the geometric mean cannot be calculated.
 5. What are some practical applications of the geometric mean in business?
Ans. The geometric mean is widely used in finance and investment analysis. It is used to calculate compound annual growth rates (CAGR), average investment returns, and inflation rates. It is also used in industries such as insurance, real estate, and manufacturing to analyze trends and measure performance over time.

115 videos|142 docs

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