Index NumbersPYQ May 25Question 4099 of 197
All Questions

Chain Index is equal to

Options

Alink relative of current year×chain index of current year100\displaystyle \frac{\text{link relative of current year} \times \text{chain index of current year}}{100}
Blink relative of previous year×chain index of current year100\displaystyle \frac{\text{link relative of previous year} \times \text{chain index of current year}}{100}
Clink relative of current year×chain index of previous year100\displaystyle \frac{\text{link relative of current year} \times \text{chain index of previous year}}{100}
Dlink relative of previous year×chain index of previous year100\displaystyle \frac{\text{link relative of previous year} \times \text{chain index of previous year}}{100}
For any discrepancies in this question, email contact@cadada.in

Correct Answer

✅ Option c — link relative of current year×chain index of previous year100\displaystyle \frac{\text{link relative of current year} \times \text{chain index of previous year}}{100}

All Options:

  • Alink relative of current year×chain index of current year100\displaystyle \frac{\text{link relative of current year} \times \text{chain index of current year}}{100}
  • Blink relative of previous year×chain index of current year100\displaystyle \frac{\text{link relative of previous year} \times \text{chain index of current year}}{100}
  • Clink relative of current year×chain index of previous year100\displaystyle \frac{\text{link relative of current year} \times \text{chain index of previous year}}{100}
  • Dlink relative of previous year×chain index of previous year100\displaystyle \frac{\text{link relative of previous year} \times \text{chain index of previous year}}{100}

Detailed Solution & Explanation

In the construction of chain base index numbers:
1. First, we compute the link relatives for each year:
Link Relative of current year=Price of current yearPrice of previous year×100\text{Link Relative of current year} = \frac{\text{Price of current year}}{\text{Price of previous year}} \times 100 2. Next, the chain index is constructed by multiplying the link relative of the current year with the chain index of the previous year and dividing by 100:
Chain Index of current year=Link Relative of current year×Chain Index of previous year100\text{Chain Index of current year} = \frac{\text{Link Relative of current year} \times \text{Chain Index of previous year}}{100} This matches the formula in Option c.

Hence, **Option C** 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.

Related Comparison Tables

Cardinal vs Ordinal Utility: Measuring Satisfaction

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

Ready to Master Index Numbers?

Practice all 197 questions with instant feedback, earn XP, track your streaks, and ace your CA Foundation exam.

Start Practicing — It's Free