posted by Ben
A certian company enjoyed 3.5% profits in year 1 over its revenue in Year 0. In Year 2, it enjoyed 5.75% profits over Year 1. In Year 3, it posted 1.25% profits over Year 2. What single, constant profit over this period of years would have produced the same profit? The teacher stated to use either harmonic or geometric mean, which ever is appropriate. I am not sure which one to use or how to set it up. My stats book is sadly lacking with examples of these.
Any direction would be helpful and much appreciated.