Which formula fails the Factor Reversal Test? MCQ with Answer and Explanation

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Which formula fails the Factor Reversal Test?

A. Marshall-Edgeworth Index

B. Both B and C

C. Fisher's Ideal Index

D. Laspeyres' Index

Answer: Option B

Solution (By JKExamLibrary)

Only Fisher's Ideal Index satisfies both the Time Reversal and Factor Reversal Tests; Laspeyres and Marshall-Edgeworth fail the factor test.

This question belongs to: Accountancy and Statistics Statistics

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Practice More Statistics Questions

Question #1 Report Error

Which of the following pairs are mutually exclusive?

A. Getting an even number and a prime number on a die

B. Getting a head and a tail in a single coin toss

C. Drawing a heart and a queen from a deck

D. Getting a 4 and an even number on a die

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Correct Answer: Option B

Explanation:
Head and tail cannot occur simultaneously in one toss.

This question belongs to: Accountancy and Statistics Statistics

Question #2 Report Error

The value of a random variable that occurs with the highest frequency in a probability distribution is called the:

A. Mode

B. Variance

C. Expected value

D. Median

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Correct Answer: Option A

Explanation:
By definition, the mode represents the most probable or most frequent outcome.

This question belongs to: Accountancy and Statistics Statistics

Question #3 Report Error

In Bayes' theorem, the initial probabilities before observing evidence are called:

A. Likelihoods

B. Posterior probabilities

C. Prior probabilities

D. Marginal probabilities

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Correct Answer: Option C

Explanation:
Prior probabilities represent the initial degree of belief.

This question belongs to: Accountancy and Statistics Statistics

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