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,
Considering the following information, what is the price of the share as per Gordon’s Model? Details of the Company Net sales Rs.120 lakhs Net profit margin 12.5% Outstandin
How are the members of the board of directors of a corporation chosen and to whom do these board members owe their primary allegiance? The Members of a corporation's board of d
Ask question #Minimum250 words accepted#
When a manager measures the interest rate exposure, he would be interested in analyzing the exposure to a set of changing interest rate. The process of r
An options strategy by which an investor owns a position in both a call and put market with the same strike price and expiration date.
Is it possible for a company with a positive net income and which does not distribute dividends to find itself in suspension of payments? Yes. A lot of companies which entered
Under what circumstances would market to book value ratios be misleading? Explain. The Market to Book ratio is helpful, but it is just only a rough approximation of how liquid
Assume that the current spot exchange rate is FF6.25/$ and the 3 month forward exchange rate is FF6.28/$. The 3 month interest rate is 5.6% per year in the U.S. and 8.8% per year i
Q. What do you mean by Economic risk? Transaction risk is appears as the short-term manifestation of economic risk which could be defined as the risk of the present value of a
It is not easy to determine the theoretical value of non-treasury securities. However, we can use the treasury spot rate for the valuation of non-treasury security.
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