I If Two or More Series of Index Numbers Have

question 83

Multiple Choice

i. If two or more series of index numbers have the same year as the base period, then they can be compared directly. ii. When two or more series of index numbers to be compared do not have the same base period, we select a common base period for all series. Then we use the respective base numbers as the denominators and convert each base to the new base.
iii. Canada pension plan payments and old age security pensions are periodically adjusted based on the Consumer Price Index.

• A) (i), (ii), and (iii) are all correct statements.
• B) (i) and (ii) are correct statements but not (iii).
• C) (i) and (iii) are correct statements but not (ii).
• D) (ii) and (iii) are correct statements but not (i).
• E) (i), (ii), and (iii) are all false statements.

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Definitions:

Price Following Split

The adjusted price of a stock after the company carries out a stock split, intended to make the stock more affordable to investors.

Residual Dividend Policy

A strategy where dividends to shareholders are paid from the residual or leftover equity once all project and operational costs have been met.

Target Capital Structure

Refers to the mix of debt, equity, and other financing sources a company aims to maintain to fund its operations and growth.

Dividend Payout Ratio

The fraction of net earnings a firm pays to its shareholders as dividends, expressed as a percentage.