If the Consumer Price Index (CPI) Was 125 at Year-End

question 14

Multiple Choice

If the consumer price index (CPI) was 125 at year-end of 2008 and 132.5 at year-end 2009, inflation during 2009 was

• A) zero; prices were stable during 2009.
• B) 6.0 percent.
• C) 7.5 percent.
• D) 12.5 percent.

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Definitions:

Future Cash Flows

Projected cash receipts and payments over a certain period, considered in investment analysis to determine an asset's present value.

S-corporation

A special type of corporation in the U.S. that allows profits, and some losses, to be passed directly to owners’ personal income without being subject to corporate tax rates.

Double Taxation

The levying of tax by two or more jurisdictions on the same declared income, asset, or financial transaction.

Financial Theory

The study of how individuals and corporations make investment decisions, and how these decisions affect financial markets and the overall economy.