USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)

-Refer to Exhibit 4.1. Compute an unweighted price indicator series, using geometric means. What is the percentage change in the index from Day T to Day T+1? Assume a base index value of 100 on Day T.
A) 5.35 percent
B) 7.48 percent
C) 9.93 percent
D) 6.33 percent
E) 0 percent

Question

USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)
 
-Refer to Exhibit 4.1. Compute an unweighted price indicator series, using geometric means. What is the percentage change in the index from Day T to Day T+1? Assume a base index value of 100 on Day T.
A) 5.35 percent 
B) 7.48 percent 
C) 9.93 percent 
D) 6.33 percent 
E) 0 percent

Quizplus · Accepted Answer

The geometric mean for Day T+1 prices compared to Day T prices shows a percentage change, which can be calculated using the formula for the geometric mean of price relatives. The calculation involves finding the nth root (where n is the number of items) of the product of the price relatives, then multiplying by the base index (100 in this case) to find the new index value. The percentage change is the difference between the new and base index values, divided by the base index value, multiplied by 100. Without the specific prices, the exact calculation steps can't be shown, but the correct answer is derived from applying this method.