In the investment world, it’s common to discuss average rates of return. It’s not sufficient, however, to simply add up historical returns and divide by how many there are. The proper way to calculate ...

An unbiased forecast of the terminal value of a portfolio requires compounding of its initial value at its arithmetic mean return for the length of the investment period. Compounding at the arithmetic ...

Of all the ideas we've forgotten from math class, the most important to relearn — because it illuminates our most urgent challenges — is the difference between arithmetic and geometric progressions.

Chris Gallant, CFA, is a senior manager of interest rate risk for ATB Financial with 10 years of experience in the financial markets. Vikki Velasquez is a researcher and writer who has managed, ...

Adam Hayes, Ph.D., CFA, is a financial writer with 15+ years Wall Street experience as a derivatives trader. Besides his extensive derivative trading expertise, Adam is an expert in economics and ...