The most appropriate average in averaging the price relatives is:

Median

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Harmonic mean

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Arithmetic mean

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Geometric mean

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Solution

The correct option is D Geometric mean
$\Rightarrow$ The most appropriate average in averaging the price relative is : $G e o m e t r i c m e a n .$
$\Rightarrow$ The geometric mean is the average of a set of products, the calculation of which is commonly used to determine the performance results of an investment or portfolio. It is technically defined as "the 'n'th root product of 'n' numbers.
$\Rightarrow$ The geometric mean must be used when working with percentages, which are derived from values.

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Similar questions

Indicate the most appropriate alternative from the multiple choices provided against each question.

(i) The most suitable average for qualitative measurement is

(a) Arithmetic mean (b) Median

(e) None of these

(ii) Which average is affected most by the presence of extreme items?

(a) Median (b) Mode

(e) Harmonic mean

(iii) The algebraic sum of deviation of a set of n values from AM is

(a) n (b) 0

Discuss simple average of price relative method.

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