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Circular test, an index constructed for the year 'x' on the base year 'y' and for the year 'y' on the base year 'z' should yield the same result as an index constructed for 'x' on base year 'z' i.e. I01 x I12 x I20 equal is:
- a)3
- b)2
- c)1
- d)None of these.
Correct answer is option 'C'. Can you explain this answer?
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Circular test, an index constructed for the year x on the base year y ...
Explanation:
Concept:
Circular test in index numbers refers to the property that if an index is constructed for a certain year on a certain base year, and then again for another year on the base year of the first index, the result should be the same as constructing the index directly for the two years on the common base year.
Example:
Let's consider the years:
x - Index constructed on base year y
y - Index constructed on base year z
z - Index constructed on base year x
Calculation:
To demonstrate the circular test property, we need to show that:
I01x * I12x = I20x
This implies that the product of the index numbers for year x on base year y and year y on base year z should be equal to the index number for year x on base year z.
Conclusion:
Therefore, the correct answer is option 'c) 1', as per the circular test property of index numbers.
Concept:
Circular test in index numbers refers to the property that if an index is constructed for a certain year on a certain base year, and then again for another year on the base year of the first index, the result should be the same as constructing the index directly for the two years on the common base year.
Example:
Let's consider the years:
x - Index constructed on base year y
y - Index constructed on base year z
z - Index constructed on base year x
Calculation:
To demonstrate the circular test property, we need to show that:
I01x * I12x = I20x
This implies that the product of the index numbers for year x on base year y and year y on base year z should be equal to the index number for year x on base year z.
Conclusion:
Therefore, the correct answer is option 'c) 1', as per the circular test property of index numbers.
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Circular test, an index constructed for the year x on the base year y and for the year y on the base year z should yield the same result as an index constructed for x on base year z i.e. I01x I12x I20equal is:a)3b)2c)1d)None of these.Correct answer is option 'C'. Can you explain this answer?
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Circular test, an index constructed for the year x on the base year y and for the year y on the base year z should yield the same result as an index constructed for x on base year z i.e. I01x I12x I20equal is:a)3b)2c)1d)None of these.Correct answer is option 'C'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Circular test, an index constructed for the year x on the base year y and for the year y on the base year z should yield the same result as an index constructed for x on base year z i.e. I01x I12x I20equal is:a)3b)2c)1d)None of these.Correct answer is option 'C'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Circular test, an index constructed for the year x on the base year y and for the year y on the base year z should yield the same result as an index constructed for x on base year z i.e. I01x I12x I20equal is:a)3b)2c)1d)None of these.Correct answer is option 'C'. Can you explain this answer?.
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