Question

1) What does the subscript "t" as in Pt mean in the HPR formula? a. It means ton of money. b. It means total. c. It's a time-marker. d. It's a tax marker.

2)

So, which of the following does P₂₀₀₇ not mean?

	a.	Average Price during 2007
	b.	Price at the close of market in 2007
	c.	Price as of the end of trading in 2007
	d.	Price at the end of 2007

3) If t = 2010 and n = 5, (a) P_t = ___________ and (b) it means ____________ and (c) P_t+n = ____________ and (d) itmeans  ______________

		P2010
		Price at the end of 2010
		P2015
		Price at the end of 2015

4) Under what circumstance is it appropriate to use geometric AVG?

	a.	If the observed data is historical and there exists a compounding effect throughout the data over time.
	b.	If the observed data is cross-sectional and there exists no compounding effect throughout the data over time.
	c.	If the observed data is historical and there exists no compounding effect throughout the data over time.
	d.	If the observed data is cross-sectional and there exists a compounding effect throughout the data over time.

5) Which of the following is not a correct formula for geometric AVG?

	a.
	b.
	c.

Answer 1

Q - 1

The correct answer is: c. It's a time-marker.

The t is subscript for t.

Q - 2

The correct answer is : a. Average Price during 2007

P_t stands for price at the end of year t or at the end of trading at time t.

Q - 3

If t = 2010 and n = 5, (a) P_t = P₂₀₁₀and (b) it means Price at the end of 2010 and (c) P_t+n = P_{2010 + 5} = P₂₀₁₅and (d) it means Price at the end of 2015.

Q - 4

The correct answer is: a. If the observed data is historical and there exists a compounding effect throughout the data over time.

This is the most suitable case for applying geometrical avg.

Q - 5

Options are not visble. Hence, can't be answered.