What is Average ?

Average Properly weighted and adjusted arithmetic mean of certain significant to represent general market behaviour, or a particular class of shares.

The annualized return is a type of average used in finance. For example, if there are two years in which the return in the first year is -10% and the return in the second year is +60%, then the annualized return, R, can be obtained by solving the equation: (1 – 10%) × (1 + 60%) = (1 + R) × (1 + R). The value of R that makes this equation true is 20%. Note that changing the order to find the annualized returns of +60% and -10% gives the same result as the annualized returns of -10% and +60%.

 

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