The harmonic mean is most appropriate for calculating:

A Average returns

B Average cost per share when investing equal dollar amounts (dollar-cost averaging)

C Geometric returns

D Standard deviation

✓ Correct Answer: Option B

Harmonic mean weights by reciprocals—appropriate for dollar-cost averaging where equal dollars buy different quantities.

💡 Why is B) the correct answer?

The correct answer to the question "The harmonic mean is most appropriate for calculating:" is Option B: Average cost per share when investing equal dollar amounts (dollar-cost averaging).

The other options — A) Average returns, C) Geometric returns, D) Standard deviation — are incorrect for this CFA Exam Prep question. As explained above: Harmonic mean weights by reciprocals—appropriate for dollar-cost averaging where equal dollars buy different quantities.

📚 About This CFA Exam Prep Practice Question

This 3-level CFA Exam Prep question from the Quantitative Methods topic is part of BrainForge Quiz's free exam preparation library. Each question includes the correct answer and a detailed explanation to help you understand the underlying concept, not just memorize the answer.

How to use this page: Read the question above, consider all four options (A through D), then check the highlighted correct answer and explanation. For active timed practice, start a free CFA Exam Prep practice test or use flashcards for spaced repetition review.

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The harmonic mean is most appropriate for calculating:

✓ Correct Answer: Option B

📚 About This CFA Exam Prep Practice Question

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