Page 46 - FINAL CFA SLIDES JUNE 2019 DAY 2

LOS 8.e: Calculate and interpret measures of central Session Unit 2:
tendency, including the population mean, sample 8. Statistical Concepts and Market Returns
mean, arithmetic mean, weighted average or mean,
geometric mean, harmonic mean, median, and
mode, p.138

Measures of central tendency (MCT) identify the center, or average/mean of a data set

Example: Population mean and sample mean: Assume you and your research assistant are evaluating the stock of AXZ Corporation.
You have calculated the stock returns for AXZ over the last 12 years to develop the following data set. Your research assistant has
decided to conduct his analysis using only the returns for the five most recent years, which are displayed as the bold numbers in the
data set. Given this information, calculate the population mean and the sample mean. Data set: 12%, 25%, 34%, 15%, 19%, 44%, 54%,
33%, 22%, 28%, 17%, 24%

These are Arithmetic Means (AM) –

Amongst the best MCTs..