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Last updated date: 15th Aug 2024
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Hint: The Geometric Mean is one of the central tendencies. It is the average growth of investment calculated by taking the product of $n$ variables and then finding the ${n^{th}}$ root of the same. Geometric Mean is the average return of an investment over time. Geometric Mean is a metric unit which is used to calculate the performance of a single investment or portfolio.

The Geometric Mean, abbreviated as G.M. of a series of $n$ observation is the ${n^{th}}$ root of the product values of the entries.
Let ${x_1},{\text{ }}{x_2},{\text{ }}{x_3},{\text{ }}{x_4}, \ldots .{\text{ }}{x_n}$be the observation then the geometric of the data is defined as
$G.M. = \sqrt[n]{{{x_1} \times {\text{ }}{x_2} \times {\text{ }}{x_3} \times {x_4} \times \ldots .{\text{ }} \times {x_n}}}$
Or,
$G.M. = {\left( {{x_1} \times {\text{ }}{x_2} \times {\text{ }}{x_3} \times {x_4} \times \ldots .{\text{ }} \times {x_n}} \right)^{\frac{1}{n}}}$
We have to state the advantages and disadvantages of the Geometric Mean
The three central tendencies are mean, median and mode. Geometric Mean is the most appropriate for the series that exhibit a serial correlation, this is especially correct for the investment portfolios. Geometric Mean is technically defined as the ${n^{th}}$ root product of $n$ numbers or data. It must be used in the scenario where the data is in percentages, which are derived from the values. It is a complex calculation but very precise.