Index NumbersMCQMTP Dec 22 - Series IQuestion 3849 of 197

The Circular Test is known as:

\displaystyle P_{01} \times P_{10} = 1

\displaystyle P_{01} \times P_{10} \ne 1

\displaystyle P_{01} \times P_{12} \times P_{21} = 1

\displaystyle P_{01} \times P_{12} \times P_{21} \ne 1

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Correct Answer

✅ Option c — $\displaystyle P_{01} \times P_{12} \times P_{21} = 1$

The **Circular Test** for three periods (

\displaystyle 0

\displaystyle 1

, and

\displaystyle 2

) is defined as:

P_{01} \times P_{12} \times P_{20} = 1

In standard exam options, the third term has a typo and is printed as

\displaystyle P_{21}

instead of

\displaystyle P_{20}

. Therefore, the closest option representing this circular test structure is:

P_{01} \times P_{12} \times P_{21} = 1

Hence, **Option C** is the correct answer.

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.

Exam Strategy Tip

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

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