Suppose We Shopped for a Basket of Goods in Year

question 62

Multiple Choice

Suppose we shopped for a basket of goods in Year 1 and it cost $350. Suppose the same basket of goods adds up to $385 in Year 2. If we use Year 1 as a base year, what would be the Year 2 CPI?

• A) 35.
• B) 90.
• C) 100.
• D) 110.
• E) 135.

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Definitions:

Liabilities

Financial obligations or debts owed by a company or individual to creditors, typically categorized as current or long-term.

Rebalancing

The process of realigning the proportions of assets in a portfolio to maintain the original or desired level of asset allocation and risk.

Durations

A measure of the sensitivity of the price of a bond or other debt instrument to changes in interest rates, often used as an indicator of interest rate risk.

Yield Curve

A graph of yield to maturity as a function of time to maturity.