Get Geometric Average Permeability Formula Background
Get Geometric Average Permeability Formula Background. Investment professionals often use the geometric average, more commonly called the geometric mean. The geometric mean return formula is used to calculate the average rate per period on an investment that is compounded over multiple periods.
Arithmetic average return overstates an investment's performance where the returns are volatile.
A rule of thumb is to for vertical wells fully penetrating nonfractured reservoirs, it is usually the average (geometric mean) of. Popularly called geometric mean return, it is primarily used for investments that are compounded. The geometric mean is another way to find the average value of a number set, but instead of adding the values and dividing like you would to find the arithmetic mean, you multiply them together before taking the root. The geometric mean differs from the arithmetic average, or arithmetic mean, in how it is calculated because it takes into account the compounding that occurs from period to period.
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