The Geometric Mean Model In Finance

Authors

  • Galadima D. J. 1School of Science Technology, Federal College of Chemical and Leather Technology, P.M.B 1034, Zaria
  • Tsaku N. 2Department of Mathematics, Nasarawa State University, Keffi

Abstract

Geometric mean has relatively few applications in the field of science and engineering. However recent work on geometric mean has discovered very important and useful applications of the geometric mean in international banking. This paper investigates the reciprocity property of the geometric mean over the arithmetic and harmonic means, which makes it useful in the field of finance. Applications are discussed on the computation of average daily exchange rate of a currency in a given period and also of a simple effective exchange rate index for a currency relative to a reference period.      

Author Biography

Galadima D. J., 1School of Science Technology, Federal College of Chemical and Leather Technology, P.M.B 1034, Zaria

Head and Senior Lecturer, Department of Biological Sciences

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Published

2009-09-12

Issue

Vol. 3 No. 4 (2008)

Section

ARTICLES