- CFA Exams
- CFA Level I Exam
- Topic 2. Economics
- Learning Module 11. Understanding Business Cycles
- Subject 7. Inflation
CFA Practice Question
If the cost of a basket of goods is $125 in 2009, $135 in 2010, and $150 in 2011, assuming 2011 is the base year, the CPI for 2009 is ______.
Correct Answer: 83
The formula for the CPI for a given year is: CPI = cost in a given year/cost in a base year*100. In this case, 125/150*100 = 83.
User Contributed Comments 4
| User | Comment |
|---|---|
| chbourke | 83 is the index of the CPI and not the % of the year wish is 8.43%. Because the Index for 2010 is 90. |
| viannie | we are measuring CPI WE use CPI as a parameter to measure inflation but in this question, it's only measuring CPI |
| DonAnd | CPI = (Cost of CPI basket @ current-period prices/Cost of CPI basket @ base-period prices)* 100 |
| schweitzdm | Unsure of why this equation was missing from the study notes for this section |