Indexes

If the ratio of the coincident index to the lagging index is rising but then starts to slow, this may indicate: A) the beginning of decreased volatility in the economy. B) the beginning of an upturn in the economy. C) the beginning of a slowdown in the economy.

conincident/lagging rising would say that the current trends are outpacing lagging trends, but if slows that means the lagging indicators are increasing, so I am guessing C. I guess I would think you would need to know more about the direction each index is headed really though

n/a

c

C

C

c for me too. shows decreased activity of coincident indicators

Your answer: C was correct! The ratio of the coincident index to the lagging index is used by some analysts to forecast the economy. If the ratio is rising but subsequently starts to slow, this may indicate the beginning of a slowdown in the economy.

C

C The less lagging indicator (numerator) is starting to slow down relative to the more lagging indicator (denominator)

C looks logical

Dwight Wrote: ------------------------------------------------------- > If the ratio of the coincident index to the > lagging index is rising but then starts to slow, > this may indicate: > > A) the beginning of decreased volatility in the > economy. > > B) the beginning of an upturn in the economy. > > C) the beginning of a slowdown in the economy. I do not recall reading this thing in the CFAI curriculum. Is that only mean that my retention rate is basically zero?

tibwa: It means your retention rate is not 100%. BTW no one has 100% retention rate. Cheers