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Essay heading: Arithmetic vs. Geometric Means: Empirical
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Business |
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June 17, 2004 |
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7 / 1817 |
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It does not measure the variability of the journey, as does the
AM. As noted in SBBI, the GM is backward looking. There is no difference in the GM of
two stocks (or portfolios), one of which is highly volatile and the other of which is absolutely
1 SBBI-1996, p. 104
2
stable, while the AM is forward looking in that it does impound the volatility of the stocks...
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As noted in SBBI, the GM is backward looking. There is no difference in the GM of
two stocks (or portfolios), one of which is highly volatile and the other of which is absolutely
1 SBBI-1996, p. 104
2
stable, while the AM is forward looking in that it does impound the volatility of the stocks.
As Mark Twain said, “Forecasting is difficult—especially into the future...
displayed next 300 characters
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