Consider the Following Table

question 12

Essay

Consider the following table.It provides the price and quantity data for three brands of a good.
a.Compute the weighted aggregate price index using the Laspeyres method with 2008 as the base year.
B)Compute the weighted aggregate price index using the Paasche method with 2008 as the base year.
C)Suppose the new price and quantity data was available for the base year of 2000 instead of 2008.Would this lead to a substantial difference between the two indices? Explain your answer.

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Definitions:

Risk-Free Rate

The theoretical return on investment with no risk of financial loss, often represented by the yield on government bonds.

Actual Return

The real gain or loss experienced on an investment over a specified period, typically expressed as a percentage.

Overpriced

Refers to an asset or service that is being sold for a price higher than its perceived or intrinsic value.

Portfolio Beta

An indicator of the fluctuation or inherent risk in a portfolio relative to the overall market.