Geometric Mean
See CAGR (Compounded Annual Growth Rate)
Frequently Asked Questions about Geometric Mean
What is the Geometric Mean in real estate analysis?
The Geometric Mean, in the context of real estate investment analysis, is another name for the Compounded Annual Growth Rate (CAGR). It represents the constant annual growth rate over a period of time.
Where can I find more information about the Geometric Mean?
See the glossary entry for CAGR (Compounded Annual Growth Rate), which provides a detailed explanation of how the Geometric Mean is used in performance measurement.
How does the Geometric Mean compare to IRR?
Refer to the resource titled “Using Geometric Mean (or CAGR) as an Alternative to IRR (Updated May 2024)” for a comparison between the two metrics and when one may be preferred over the other.
Is the Geometric Mean the same as APY?
While similar in concept, APY (Annual Percentage Yield) includes the effect of compounding interest in savings accounts, while Geometric Mean/CAGR focuses on investment growth over time.
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