If the Price of Clothing (Which Accounts for 5 Percent

question 4

Multiple Choice

If the price of clothing (which accounts for 5 percent of total expenditures in the CPI basket) , rises by 10 percent in one year while the prices of all other goods remain constant, by how much will the CPI rise?

• A)0.5 percent
• B)5 percent
• C)10 percent
• D)50 percent

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Definitions:

Initial Public Offering (IPO)

The process by which a private company offers its shares to the public for the first time, becoming a publicly traded company.

Underwriters

Professionals or entities that evaluate and assume the risk of another party, often in the context of issuing insurance policies or underwriting securities in financial markets.

Offer Price

The price at which an asset or service is offered for sale to potential buyers.

Ex-Rights Price

The ex-rights price is the stock price after the rights to purchase additional shares at a discount have been separated from the stock.