Index NumbersMCQMTP June 24 Series IIQuestion 3867 of 197
All Questions

________ is an extension of time reversal test.

Options

AFactor reversal test
BCircular test
CUnit test
DNone of these
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Correct Answer

✅ Option b — Circular test

All Options:

  • AFactor reversal test
  • BCircular test
  • CUnit test
  • DNone of these

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Detailed Solution & Explanation

The **Circular Test** is a multi-period extension of the Time Reversal Test. While the Time Reversal Test is defined for two periods (0 and 1) as P01×P10=1\displaystyle P_{01} \times P_{10} = 1, the Circular Test extends this to three or more periods (0, 1, 2) as: P01×P12×P20=1P_{01} \times P_{12} \times P_{20} = 1 Thus, it is an extension of the time reversal test. 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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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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