Which of the Following Is True About Index Numbers? Index

question 39

Multiple Choice

Which of the following is true about index numbers? Index numbers are:

• A) used to measure the trend component.
• B) used to measure the seasonal component.
• C) used to measure the cyclical component.
• D) used to make a relative comparison of different time periods.

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Definitions:

Expected Monetary Value

The predicted amount of money that an action or decision is expected to generate, considering all possible outcomes and their probabilities.

Index Funds

Mutual funds or exchange-traded funds designed to replicate the performance of a specific index, such as the S&P 500.

Day Trader

An individual who buys and sells financial instruments, such as stocks, within the same trading day, aiming to capitalize on short-term market fluctuations.

Investing

The act of dedicating resources (such as capital, time, or effort) to an endeavor with the expectation of achieving a profit or material result.