Index NumbersMCQPYQ May 18Question 3778 of 197
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Price - relative is expressed in term of

Options

APnP0\displaystyle \frac{P_n}{P_0}
BP0Pn\displaystyle \frac{P_0}{P_n}
CP=PnP0×100\displaystyle P = \frac{P_n}{P_0} \times 100
DP=P0Pn×100\displaystyle P = \frac{P_0}{P_n} \times 100
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Correct Answer

✅ Option a — PnP0\displaystyle \frac{P_n}{P_0}

All Options:

  • APnP0\displaystyle \frac{P_n}{P_0}
  • BP0Pn\displaystyle \frac{P_0}{P_n}
  • CP=PnP0×100\displaystyle P = \frac{P_n}{P_0} \times 100
  • DP=P0Pn×100\displaystyle P = \frac{P_0}{P_n} \times 100

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Detailed Solution & Explanation

The **price relative** of a commodity is the ratio of its price in the current year (Pn\displaystyle P_n) to its price in the base year (P0\displaystyle P_0). It is mathematically expressed as: Price Relative=PnP0\text{Price Relative} = \frac{P_n}{P_0} Note: Sometimes it is expressed as a percentage, i.e., PnP0×100\displaystyle \frac{P_n}{P_0} \times 100. However, in its basic ratio form, it is PnP0\displaystyle \frac{P_n}{P_0}. Hence, **Option A** is the correct answer.

About This Chapter: Index Numbers

Paper

Paper 3: Quantitative Aptitude

Weightage

4-6 Marks

Key Topics

Construction of Index Numbers, Time Series

This chapter covers Construction of Index Numbers, Time Series and is part of Paper 3: Quantitative Aptitude in the CA Foundation exam.

View Official ICAI Syllabus

Exam Strategy Tip

This topic carries 4-6 Marks weightage. Focus on understanding core concepts rather than memorizing.

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More Questions from Index Numbers

In price index, when a new commodity is required to be added, which of the following index is used?

Fisher's ideal formula for calculating index number satisfies the ________

Shifted Price Index = Original Price IndexPrice Index of the year on which it has to be shifted×100\displaystyle \frac{\text{Original Price Index}}{\text{Price Index of the year on which it has to be shifted}} \times 100

If Laspeyres's Index Number is 250 and Paasche's Index Number is 160, then Fisher's Index number is

If ∑P0q0=240\displaystyle \sum P_0q_0 = 240, ∑P1q0=480\displaystyle \sum P_1q_0 = 480, ∑P0q1=600\displaystyle \sum P_0q_1 = 600 and ∑P1q1=192\displaystyle \sum P_1q_1 = 192, then Laspeyres's Index Number is

If ΣPnqn=249\displaystyle \Sigma P_n q_n = 249, ΣP0q0=150\displaystyle \Sigma P_0 q_0 = 150, ΣPnq0=145\displaystyle \Sigma P_n q_0 = 145 and Paasche's Index Number = 150, then Fisher's Ideal Price Index Number is

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