Geometric Mean – Excel Template

Ned Krastev
Ned Krastev

Geometric Mean represents the average, or the mean, of a set of values. It is estimated by taking the product of the values we are calculating a geometric mean for.

The uncertainty in cash flows creates a divergence between arithmetic and geometric returns. If there is no variance, arithmetic and geometric returns coincide. In real-world conditions we do have variance so arithmetic returns will be higher than geometric returns, thus representing a more favorable viewpoint.

Other related topics you might be interested to explore are Arithmetic Mean, and Measures of Central Tendency.

This is an open-access Excel template in XLSX format that will be useful for anyone who wants to work as a Statistician, Business Intelligence Analyst, Data Scientist, Portfolio Manager, or Risk Manager.

You can now download the Excel template for free.

Geometric Mean is among the topics included in the Quantitative Methods module of the CFA Level 1 Curriculum.