Index Numbers(11th Grade > Statistics ) Questions and answers for exam Preparation

11th Grade > Statistics

INDEX NUMBERS MCQs

Total Questions : 30 | Page 3 of 3 pages

(I) The SENSEX is a free-float market-weighted stock market of 30 well established and financially sound companies listed on Bombay stock exchange.
(II) The NIFTY 50 is NSE’s benchmark broad based stock market index for the Indian equity market. It represents the simple average of 50 Indian company stocks in 12 sectors.

Statement I and II are true
Statement I is false and Statement II is true
Statement I is true and Statement II is false
Statement I and II are false

Discuss Question

Answer: Option C. -> Statement I is true and Statement II is false
:
C

SENSEX and NIFTY 50 are the weighted average stock markets of 30 and 50 blue chip stocks respectively.

Question 22.

Construction of index of industrial production(IIP) in India involves _____.

Classification of industries
Classification of consumer class
Information about family expenditure or budget
Weightage given to different industries based on their relative importance

Discuss Question

Answer: Option A. -> Classification of industries
:
A and D

IIP requires classification of industries based on their relative importance, weights are given. Classification of consumer class and information about family expenditure or budget are covered under CPI and not IIP.

Question 23.

The drawbacks of the simple aggregative method are:

(I) The items with large unit prices have greater influence on the index.

(II) No weightage is given to the relative importance of the items.

Both statements (I) & (II) are true
Statement (I) is false but statement (II) is true
Both statements (I) & (II) are false
Statement (I) is true but statement (II) is false

Discuss Question

Answer: Option A. -> Both statements (I) & (II) are true
:
A

Simple aggregative method doesn't consider the relative importance of the items. Index is influenced by the items with the large unit prices.

Question 24.

When the stock market goes up, an investor in the companies listed on it will find his investments ___.

Appreciating in value
Depreciating in value
Remaining same
Can’t say

Discuss Question

Answer: Option D. -> Can’t say
:
D

It depends on in which stocks he has made his investment and their weightage in that index/stock market. There could be a possibility that the particular stocks in which the investor has invested are in red despite the overall index in green.

Question 25.

The CPI number for urban non-manual employees can represent the changes in the cost of living of the President of India.

True
False
Both statements (I) & (II) are false
Statement (I) is true but statement (II) is false

Discuss Question

Answer: Option A. -> True
:
A

True.

The President of India resides in urban area and is an non-manual government employee, so he will come under the category of urban non-manual employees and hence his cost of living can be reflected in CPI UNME.

Question 26.

In the wholesale price index of India, highest weightage is given to______.

Primary articles
Fuel, power, light and lubricants
Manufacturing
None of these

Discuss Question

Answer: Option C. -> Manufacturing
:
C

Manufacturing is given the highest weightage of approx 63% followed by primary articles(22%) and Fuel, power, light & lubricants(14%).

Question 27.

An ideal index number would be one which takes into account as weights ______.

Prices of both base and current year
Quantities of both base and current year
Prices and quantities of both base and current year
Prices of current year

Discuss Question

Answer: Option C. -> Prices and quantities of both base and current year
:
C

Prices and quantities of both base and current year when taken into consideration give a more consistent result as compared to other indexes deploying either only prices or quantities.

Question 28.

The CPI is slightly different from the cost of living index in that the latter includes aspects such as environment, education, health apart from CPI and that’ why CPI is sometimes called “conditional” cost of living index.