Value index numbers, Financial Management

Assignment Help:

Value Index Numbers

The value index number as described earlier is a combination index which combines price and quantity changes. Because of the difficulties experienced in price and quantity indices, the usage of the value index has been suggested. The value index number can be calculated by the following formula,

=

885_value index numbers.png

where, P1, Q1, P0 and Q0 follow the usual notations.

Interestingly, in value indices, weights need not be used as they are inherent in these indices. The value index, an aggregate of all values, measures the changes in values in the base year and the values in the given year. The value index can also be obtained by the product of price and quantity indices. Let us calculate the value of some equity shares owned by an investor on July 27, 20x1 relative to the value of the shares owned by him on Jan 8, 20x0 as measured by the value index.

Value Index

1682_value index numbers1.png


Related Discussions:- Value index numbers

Calculate actual returns using the dividend discount model, You've just won...

You've just won a huge $100 million lottery.  You've decided to invest your winnings in the following way:  $30 million in real estate,  $30 million in  corporate bonds and $40 mil

Rannacher smoothing, Explain what is meant by a positive coefficient discre...

Explain what is meant by a positive coefficient discretization in the context of valuing options using numerical PDE methods. What is the main benefit of using a positive coefficie

Price volatility characteristics of option-free bonds, As we know tha...

As we know that price of option-free bond changes in the opposite direction from a change in bond's required yield, Table 1 and figure 1 explains this feature of

Distinguish between diversifiable and non-diversifiable risk, Question: ...

Question: (a) An efficient financial market is assumed to hold under the Capital Asset Pricing Model (CAPM). What is the main hypothesis of an efficient financial market? (

Is depreciation the loss of value of fixed assets, Is depreciation the loss...

Is depreciation the loss of value of fixed assets No. An operative (and not a pseudo-philosophical) explanation of depreciation might be: it is a number that allows us to save

Finance, Ask questiSuggestion regarding Credit limit. Should it be approved...

Ask questiSuggestion regarding Credit limit. Should it be approved or not, what should be the amount of credit limit that electronics give to Booth Plastics.

Explain the types of secondary market trading structures, Compare and contr...

Compare and contrast the various types of secondary market trading structures.  Answer:  There are two major types of secondary market trading structures:  dealer and agency.  I

Buy down loans, The buy down loan is similar to the PAM; however, it ...

The buy down loan is similar to the PAM; however, it is the seller of the property and not the buyer/borrower who places cash in a segregated account so that additional

Case, Which type of financing is appropriate to each firm?

Which type of financing is appropriate to each firm?

Calculate the economic order quantity, Q. Calculate the Economic Order Quan...

Q. Calculate the Economic Order Quantity? Calculate the Economic Order Quantity from the following details: Annual Inventory Requirements = 4, 00,000 units Cost of placin

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

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!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd