The Formula for Calculating a Price Index Is

question 8

Multiple Choice

The formula for calculating a price index is:

• A) current cost of basket ÷ base-period cost of basket.
• B) base-period cost of basket ÷ current cost of basket × 100.
• C) (base-period cost of basket ÷ current cost of basket) × current nominal value of basket.
• D) percentage change in current cost of basket ÷ percentage change in base-period cost of basket.

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Definitions:

Delivery Date

The specific date on which the delivery of the commodities, securities, or other assets is scheduled to occur in a contract.

Financial Futures

Contracts to buy or sell financial instruments, like currencies or government bonds, at a predetermined future date and price.

S&P 500 Index

A stock market index in the United States comprised of 500 major companies with publicly traded shares on the New York Stock Exchange or NASDAQ, determined by their market capitalizations.

Nikkei Index

A stock market index for the Tokyo Stock Exchange, representing the performance of leading Japanese companies.