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Investments glossary

Trimmed Mean Definition

A trimmed mean (similar to an adjusted mean) is a method of averaging that removes a small designated percentage of the largest and smallest values before calculating the mean. After removing the specified outlier observations, the trimmed mean is found using a standard arithmetic averaging formula. The use of a trimmed mean helps eliminate the influence of outliers or data points on the tails that may unfairly affect the traditional mean.

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