Index NumbersMCQPYQ Dec. 21Question 3798 of 197
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If P0n\displaystyle P_{0n} and Pn0\displaystyle P_{n0} are index for 1\displaystyle 1 on 0\displaystyle 0 and 0\displaystyle 0 on 1\displaystyle 1 respec. then formula P01×P10=1\displaystyle P_{01} \times P_{10} = 1 is used for

Options

AUnit test
BTime Reversal Test
CFactor Reversal Test
DCircular Test
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Correct Answer

Option bTime Reversal Test

All Options:

  • AUnit test
  • BTime Reversal Test
  • CFactor Reversal Test
  • DCircular Test

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Detailed Solution & Explanation

The formula P01×P10=1\displaystyle P_{01} \times P_{10} = 1 defines the **Time Reversal Test**. It requires that if the base year and current year are interchanged, the resulting index number should be the reciprocal of the original index. Hence, **Option B** 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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