How is the arithmetic mean calculated?

The arithmetic mean is calculated by summing all the values in a data set and then dividing that total by the number of values in the set. In this case, the formula presented in the correct answer accurately reflects this definition: you take each value, represented as R1, R2, and so on, up to Rt, add them together, and then divide by the total number of values, t.

This method provides a straightforward measure of central tendency, making it easy to understand the average of a set of numbers. The arithmetic mean is widely used in statistics and finance because it offers a simple way to analyze datasets and determine typical values.

Other methods presented in the choices do not accurately represent the arithmetic mean. For instance, multiplying the numbers or incorporating subtraction or squaring would yield different calculations that do not align with how the arithmetic mean is defined. Thus, the correct representation in this case is the sum of the values divided by the count of those values.