For a Given Year, an Index Number of Average Prices

question 10

Multiple Choice

For a given year, an index number of average prices (such as the Consumer Price Index) is the ratio of the

• A)price of several goods in the given year to that in the base year.
• B)average price of several goods in the base year to that in the given year.
• C)average price of all goods in the given year to that in the base year.
• D)weighted prices of a typical bundle of goods purchased in a given year to that in the base year.
• E)weighted prices of a typical bundle of goods purchased in the base year to that in the given year.

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Definitions:

Par Value

The nominal or face value of a stock or bond, typically used as an accounting standard rather than reflecting market value.

Fair Value

The price achievable in the sale of an asset or required to settle a liability in a seamless transaction with market participants at the date set for evaluation.

Common Stock

A form of corporate equity ownership, representing a claim on a portion of the company's profits and a right to vote on major company decisions.

Acquisition

The process by which one company purchases most or all of another company's shares or assets, gaining control over the acquired company.