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,
If invested 2500 in a bank that pays 1% annually. How long will it take for the funds to double?
Under this approach of Valuation, all cash flows are discounted using single interest rate (discount rate). For example: Consider the 5-year (7.00 percent) Treas
Following are return expectations on the S&P 500 index for the upcoming year with the corresponding probabilities: Expectation Return
Suppose you can decrease the cash on hand and the company will require holding Net Working Capital (including cash) equal to 4% of the next year's sales going forward. This will r
Maturity Profile Even though there is no ideal theory/concept of the maturity of the instruments, some important issues that should be considered while balancing the long-term
Question: Part A: Justify and criticize the usual assumption made in Financial Management literature that the objective of a firm is to maximize the wealth of its sharehol
Q. Just-in-time inventory management processes? Just-in-time (JIT) inventory management processes seek to eliminate any waste that arises in the manufacturing process as a resu
You have been hired as an economic advisor to the Southeastern Conference. As your first assignment they have asked you to identify three microeconomic and three macroeconomic issu
Suppose the market portfolio is equally likely to increase by 30% or decrease by 10%. a. Calculate the beta of a firm that goes up on average by 43% when the market goes up a
Consider a mortgage example to nance the purchase of a house or flat. You may use a real example or create a ctitious one. Search for dierent types of mortgages currently on oe
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: +91-977-207-8620
Phone: +91-977-207-8620
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd