CA Foundation · Quantitative Aptitude · Index Numbers
For a group of commodities, the Laspeyres price index is 108 and the Paasche price index is 75. What is Fisher's ideal price index?
Fisher's ideal index is 90. It is the geometric mean of the Laspeyres index (108) and the Paasche index (75), so it equals the square root of 8100. Using the arithmetic mean would wrongly give 91.5.
- A91.5
- B33.0
- C100.0
- D90.0Correct
Explanation
Fisher's index is the geometric mean of the Laspeyres and Paasche indices: √(108 × 75) = √8100 = 90. The arithmetic mean, 91.5, is the usual mistake. The difference, 33, has no meaning here.
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