Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Fixed Weight Aggregates Method
In fixed weight aggregates method, the weights used are neither from base period nor from current period but from a representative period. These weights are generally referred to as representative weights or as fixed weights. These fixed weights are unaffected by the selection of the base period. This is the advantage under this method. The user of the method will be able to select a base year that is convenient to him enabling him to change the price base yet retaining the fixed weights.
The students may refer to the weights assigned to various industry groups constituting the Index of Industrial Production presented in the annexure.
Fisher's Ideal method
Prof. Irving Fisher has proposed a formula for constructing index numbers, which is called the 'Fisher's Ideal Index'. The Ideal index is given by the following formula:
As evident from the above formula,
Fisher's Ideal Index is the geometric mean of the Laspeyres and Paasche indices.
The following advantages can be cited in favor of Fisher's Ideal Index:
Theoretically, geometric mean is considered the best average for the construction of index numbers and Fisher's index uses geometric mean.
As already noted, Laspeyres index and Paasche index indicate opposing characteristics and Fisher's index reduces their respective biases. In fact, Fisher's ideal index is free from any bias. This has been amply demonstrated by the time reversal and factor reversal tests.
Both the current year and base year prices and quantities are taken into account by this index.
Fisher's Ideal Index
The index is not widely used owing to the practical limitations of collecting data. Fisher's Ideal Quantity Index can be found out by the formula,
Compare and contrast the potential liability of owners of proprietorships, partnerships (general partners), and corporations. The sole proprietor has infinite liability for mat
Determine the term- Investment decision Investment decision is broadly concerned with asset-mix or composition of the assets of a firm. Concern of the financing decision is wit
What is Net Present Value? Describe please.
Should a firm hedge? Why or why not? Answer: Firms may not need to hedge exchange risk in a perfect capital market. But firms can add to their value by hedging if markets are
Determine the meaning of Reportable segments Reportable segments are operating segments or aggregations of operating segments which meet specified criteria(core princ
We can compute any forward rate using the spot rate. When we tell 3 years forward rate 4 years from now, there are two elements to consider. One is the length of
What are the Predator shareholders Predator company's shareholders mayn't approve the bid for various reasons. Reduction in EPS If consideration is
Question 1: Explain clearly how the study of Public Policy making enables us to understand how Government tackles the major problems of society. Question 2: Analyse th
The so-called "cash flow" (net income plus depreciation) is a flow of cash, but is it a flow to the shareholders or to the company? Suppose that net income plus depreciation is
Features of Treasury Bills Treasury Bills are short-term, rupee denominations issued by the Reserve Bank of India (RBI) on behalf of the Government of India. T-bills are issued
Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!
whatsapp: +1-415-670-9521
Phone: +1-415-670-9521
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd