Financial Risk Manager Part 1

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The following contains the amounts of monthly profits for a certain company for the year 2019: 1576, 1595, 1754, 1464, 1850, 1698, 1614, 1524, 4320, 1650, 1440, 1602

What is the mean?

Other

Community

NNikitesh

Last updated: February 2, 2026 at 10:22

1840.58

2007.91

1564.33

1785.44

Explanation:

The sample mean is calculated using the formula:

$\hat{\mu} = \bar{X} = \frac{1}{n} \sum_{i=1}^{n} X_i$

Summing all the monthly profits: 1576 + 1595 + 1754 + 1464 + 1850 + 1698 + 1614 + 1524 + 4320 + 1650 + 1440 + 1602 = 22087

Dividing by the number of months (12): $\bar{X} = \frac{22087}{12} = 1840.5833$

This rounds to 1840.58, which corresponds to option A.

Note that the value 4320 is significantly higher than the other monthly profits, which pulls the mean upward. This demonstrates how outliers can affect the mean.

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