# For last 3 years, your investment returned: {+35%, +35%, -70%}. Which measure of central tendency would best describe your annual return?

Arithmetic Mean, Geometric Mean, Median or Standard Variance?

Say I started with $100. 1st Year =$135

2nd Year = $182.25 3rd Year = 54.675 100-54.675 = 45.325 = loss / 3 = roughly 15 = annual loss. Arthemtic Mean is 0 so thats no good. Median is 35 so thats no good. Standard Variance doesn't measure central tendency. Geometric Mean yields 44 so where am I going wrong? • I obtain -18% for the geometric mean return ($100(1 - (1.35\times1.35\times0.30)^{1/3})\$). How do you obtain 44? – whuber Oct 30 at 21:53
• Hey thanks for helping. Isn't the formula (35 * 35 * 70)^(1/3)? I thought I had to multiply all the numbers and n root it – Benny Oct 30 at 21:54
• You seem to be treating a loss of 70% as if it were a gain of 70%! (I wish I could do that with my investments ...) – whuber Oct 30 at 21:55
• Oh i c now..wow thanks for ur help. – Benny Oct 30 at 21:56
• Just to make sure, I can't measure central tendency with standard variance, correct? – Benny Oct 30 at 21:58