You Are Given Information on the Consumer Price Index (CPI)

question 36

Multiple Choice

You are given information on the consumer price index (CPI) , where the values given are those for December 31 of each year. $$\begin{array} { c c } \text { Year } & \text { CPI } \\\hline 1997 & 126.1 \\1998 & 133.8 \\1999 & 137.9 \\2000 & 141.9 \\2001 & 145.8\end{array}$$ In which year was the inflation rate the highest?

• A) 1998
• B) 1999
• C) 2000
• D) 2001

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Definitions:

Fair Value Method

An accounting approach where assets and liabilities are reported at their current prices or the estimated amount they would fetch in the market.

Brokerage Fee

A charge levied by a broker for facilitating transactions between buyers and sellers.

Unrealized Gain

An increase in the value of an asset that has not been sold, hence the profit is not yet realized.

Trading Investments

Securities purchased and held primarily for selling them in the near term to generate income on short-term price differences.