Which of the following statements about the circular test is correct? MCQ with Answer and Explanation

Which of the following statements about the circular test is correct?
A. It is also known as the time reversal test.
B. Fisher's ideal index satisfies it.
C. It requires that P₀₁ × P₁₀ = 1.
D. The circular test is satisfied if P₀₁ × P₁₂ × P₂₀ = 1.
Answer: Option D
Solution (By JKExamLibrary)
Circular test checks consistency over multiple periods: the product of indices from 0 to 1, 1 to 2, and 2 back to 0 should equal 1. Time reversal is P₀₁×P₁₀=1.

This question belongs to: Accountancy and Statistics Statistics

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