91. Consider the following statements: 1. In India, Non-Banking Financia

Consider the following statements:

  • 1. In India, Non-Banking Financial Companies can access the Liquidity Adjustment Facility window of the Reserve Bank of India.
  • 2. In India, Foreign Institutional Investors can hold the Government Securities (G-Secs).
  • 3. In India, Stock Exchanges can offer separate trading platforms for debts.

Which of the statements given above is/are correct ?

[amp_mcq option1=”1 and 2 only” option2=”3 only” option3=”1, 2 and 3″ option4=”2 and 3 only” correct=”option4″]

This question was previously asked in
UPSC IAS – 2024
The correct option is D.
Statement 1 is incorrect. The Liquidity Adjustment Facility (LAF) is a tool used by the Reserve Bank of India (RBI) to inject or absorb liquidity into the banking system. It is primarily accessible to Scheduled Commercial Banks (SCBs). Non-Banking Financial Companies (NBFCs) do not have direct access to the LAF window.
Statement 2 is correct. Foreign Institutional Investors (FIIs), now largely categorized under Foreign Portfolio Investors (FPIs), are permitted by the RBI to invest in Government Securities (G-Secs) within prescribed limits and frameworks.
Statement 3 is correct. Stock exchanges in India, such as the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE), have established separate trading platforms specifically for debt instruments, including corporate bonds, government securities, State Development Loans, etc., to facilitate their trading.
RBI operates LAF through repurchase agreements (repos) and reverse repos. While NBFCs cannot access LAF, some large NBFCs may access funds from the banking system or the market, indirectly influenced by LAF rates. RBI also has other windows like Marginal Standing Facility (MSF) for banks and Standing Deposit Facility (SDF).

92. In the context of finance, the term ‘beta’ refers to

In the context of finance, the term ‘beta’ refers to

[amp_mcq option1=”the process of simultaneous buying and selling of an asset from different platforms” option2=”an investment strategy of a portfolio manager to balance risk versus reward” option3=”a type of systemic risk that arises where perfect hedging is not possible” option4=”a numeric value that measures the fluctuations of a stock to changes in the overall stock market.” correct=”option4″]

This question was previously asked in
UPSC IAS – 2023
In finance, ‘beta’ is a statistical measure that quantifies the sensitivity of an asset’s (like a stock) returns to the fluctuations of a relevant market index (like the overall stock market). It indicates the asset’s systematic risk relative to the market.
– Beta (β) is a measure of systematic risk, which is the risk inherent to the entire market or market segment.
– A beta of 1 implies the stock’s price moves in line with the market.
– A beta greater than 1 suggests the stock is more volatile than the market.
– A beta less than 1 suggests the stock is less volatile than the market.
– A beta of 0 implies no correlation with the market.
Beta is a key component in the Capital Asset Pricing Model (CAPM), which is used to calculate the expected return of an asset. It helps investors understand how much additional risk they are taking by investing in a specific stock compared to investing in the overall market. Beta does not measure unsystematic (or specific) risk, which can be diversified away.

93. With reference to Central Bank digital currencies, consider the follow

With reference to Central Bank digital currencies, consider the following statements :

  • 1. It is possible to make payments in a digital currency without using US dollar or SWIFT system.
  • 2. A digital currency can be distributed with condition programmed into it such as a time-frame for spending it.

Which of the statements given above is/are correct?

[amp_mcq option1=”1 only” option2=”2 only” option3=”Both 1 and 2″ option4=”Neither 1 nor 2″ correct=”option3″]

This question was previously asked in
UPSC IAS – 2023
Both statements are correct. Central Bank Digital Currencies (CBDCs) offer capabilities that can bypass traditional international payment systems like SWIFT and can potentially incorporate features like programmability.
– CBDCs allow for direct digital payment rails that do not necessarily rely on intermediary banks or existing international systems like SWIFT. This can facilitate faster and potentially cheaper cross-border transactions without requiring conversion to a specific reserve currency like the US dollar for routing.
– CBDCs can be designed with built-in rules or conditions, making them ‘programmable’. This could include setting time limits for spending (expiry dates), restricting usage to specific goods or services, or triggering payments upon fulfillment of certain conditions.
CBDCs are digital forms of a country’s fiat currency issued by the central bank. They are distinct from cryptocurrencies like Bitcoin (which are decentralized) and stablecoins (which are typically issued by private entities and pegged to an asset). Many central banks globally are researching and piloting CBDCs for various potential benefits, including payment system efficiency, financial inclusion, and monetary policy implementation.

94. According to the ‘Micro, Small and Medium Enterprises Development (MSM

According to the ‘Micro, Small and Medium Enterprises Development (MSMED) Act, 2006, the ‘medium enterprises’ are those with investments in plant and machinery between ₹ 15 crore and ₹ 25 crore.

  • 2. All bank loans to the Micro, Small and Medium Enterprises qualify under the priority sector.

Which of the statements given above is/are correct?

[amp_mcq option1=”1 only” option2=”2 only” option3=”Both 1 and 2″ option4=”Neither 1 nor 2″ correct=”option2″]

This question was previously asked in
UPSC IAS – 2023
Statement 1 is incorrect as per the definitions of ‘medium enterprises’ under the MSMED Act, 2006 (including relevant notifications before the 2020 revision). Statement 2 is correct regarding the priority sector status of bank loans to MSMEs.
– Under the MSMED Act, 2006 (prior to the 2020 revision), Medium Enterprises were defined based on investment in Plant and Machinery/Equipment, with limits generally being > ₹5 crore and <= ₹10 crore for manufacturing, and > ₹2 crore and <= ₹5 crore for services. The range ₹15 crore to ₹25 crore does not match these official definitions. - All bank loans extended to Micro, Small, and Medium Enterprises (MSMEs) generally qualify as priority sector lending as per Reserve Bank of India (RBI) guidelines. This is a policy measure to ensure adequate credit flow to these sectors.
The MSMED Act, 2006 provided the legal framework for classifying and promoting MSMEs in India. The definitions were revised in 2020, introducing a composite criterion based on both investment and annual turnover, and significantly increasing the thresholds for classification. Priority Sector Lending guidelines mandate banks to lend a certain portion of their total credit to specified sectors, including MSMEs, agriculture, education, housing, etc.

95. Consider the following statements : Statement-I: Switzerland in one of

Consider the following statements :
Statement-I: Switzerland in one of the leading exporters of gold in terms of value.
Statement-II: Switzerland has the second largest gold reserves in the world.
Which one of the following is correct in respect of the above statements?

[amp_mcq option1=”Both Statement-I and Statement-II are correct and Statement-II is the correct explanation for Statement-I” option2=”Both Statement-I and Statement-II are correct and Statement-II is not the correct explanation for Statement-I” option3=”Statement-I is correct but Statement-II is incorrect” option4=”Statement-I is incorrect but Statement-II is correct” correct=”option3″]

This question was previously asked in
UPSC IAS – 2023
Statement-I is correct but Statement-II is incorrect.
Switzerland is a major global hub for gold refining and trading and is indeed one of the leading exporters of gold by value. However, Switzerland does not have the second largest official gold reserves in the world. Countries like the USA, Germany, Italy, and France hold significantly larger gold reserves.
Switzerland’s prominence in the gold market is due to its advanced refining capacity and role as a transit country. It refines a large portion of the world’s newly mined gold and scrap gold before it is exported for distribution globally. As of recent data, the largest holders of official gold reserves are the United States, followed by Germany, Italy, and France. Switzerland’s reserves, while substantial, rank lower down the list (typically outside the top 5).

96. Consider the following infrastructure sectors: 1. Affordable housing 2

Consider the following infrastructure sectors:
1. Affordable housing
2. Mass rapid transport
3. Health care
4. Renewable energy
On how many of the above does UNOPS Sustainable Infrastructure and Innovation (S3i) initiative focus for its investments?

[amp_mcq option1=”Only one” option2=”Only two” option3=”Only three” option4=”All four” correct=”option4″]

This question was previously asked in
UPSC IAS – 2023
The UNOPS Sustainable Infrastructure and Innovation (S3i) initiative focuses on attracting and enabling investment in sustainable infrastructure projects in developing countries to support the achievement of the Sustainable Development Goals (SDGs). Sustainable infrastructure is essential across various sectors. UNOPS S3i aims to de-risk and facilitate investment in projects that have significant development impact and environmental sustainability.

Examining the listed sectors:
1. **Affordable housing:** Providing adequate and affordable housing is a key component of sustainable urban development (SDG 11) and poverty reduction (SDG 1). Sustainable infrastructure initiatives often include housing projects.
2. **Mass rapid transport:** Developing efficient and sustainable public transport systems is crucial for sustainable cities (SDG 11), reducing emissions (SDG 13), and facilitating economic activity. It is a major area of focus for sustainable infrastructure investment.
3. **Health care:** Building and improving healthcare infrastructure (hospitals, clinics, supply chains) is fundamental to achieving good health and well-being (SDG 3). Sustainable infrastructure initiatives recognize the importance of resilient and accessible health facilities.
4. **Renewable energy:** Investing in renewable energy sources (solar, wind, hydro, etc.) is vital for ensuring access to affordable, reliable, sustainable, and modern energy (SDG 7) and combating climate change (SDG 13). This is a core focus area for sustainable infrastructure investment globally, including for S3i.

Based on the mandate and typical focus areas of sustainable infrastructure development initiatives like UNOPS S3i which are aligned with the SDGs, all four sectors listed are critical areas for investment. UNOPS has indeed been involved in projects and partnerships related to these sectors through its S3i initiative. Therefore, the initiative focuses its investments on all four of the listed infrastructure sectors.

– UNOPS S3i initiative promotes investment in sustainable infrastructure for developing countries.
– The initiative’s focus aligns with achieving the Sustainable Development Goals (SDGs).
– Affordable housing, mass rapid transport, healthcare, and renewable energy are all key sectors for sustainable infrastructure development.
– UNOPS S3i activities and partnerships cover these crucial sectors.
The S3i initiative works with various partners, including governments, investors, and development banks, to overcome barriers to private sector investment in sustainable infrastructure. Its focus areas reflect the pressing needs in developing countries for infrastructure that is not only functional but also environmentally sound, socially inclusive, and economically viable in the long term.

97. Consider the investments in the following assets: 1. Brand recognition

Consider the investments in the following assets:
1. Brand recognition
2. Inventory
3. Intellectual property
4. Mailing list of clients
How many of the above are considered intangible investments?

[amp_mcq option1=”Only one” option2=”Only two” option3=”Only three” option4=”All four” correct=”option3″]

This question was previously asked in
UPSC IAS – 2023
Investments can be classified as tangible or intangible. Tangible investments are in physical assets that have substance and can be touched, such as land, buildings, machinery, and inventory. Intangible investments are in non-physical assets that derive their value from intellectual or legal rights, brand reputation, relationships, or data.

1. **Brand recognition:** This is the level of consumer awareness and identification of a particular brand. It is a non-physical asset that contributes to a company’s value through reputation and customer loyalty. It is an **intangible** investment.
2. **Inventory:** Inventory consists of raw materials, work-in-progress, and finished goods held by a company. These are physical assets. It is a **tangible** investment.
3. **Intellectual property:** This includes legal rights like patents, copyrights, trademarks, trade secrets, etc. These are non-physical assets that grant exclusive rights to the owner. It is an **intangible** investment.
4. **Mailing list of clients:** This represents valuable data about customers and potential customers. While the list might exist physically or digitally, its value lies in the information and the relationship capital it represents, which is non-physical. It is considered an **intangible** investment (often part of customer-related intangible assets).

Out of the four options, Brand recognition (1), Intellectual property (3), and Mailing list of clients (4) are considered intangible investments. Inventory (2) is a tangible investment. Therefore, there are three intangible investments listed.

– Intangible investments are in non-physical assets.
– Tangible investments are in physical assets.
– Brand recognition, intellectual property, and client lists are intangible assets.
– Inventory is a tangible asset.
Intangible assets are increasingly important drivers of value for modern businesses. Accounting standards provide guidelines for recognizing and valuing certain intangible assets, such as intellectual property.

98. Consider the following statements: The Government of India provides

Consider the following statements:

  1. The Government of India provides Minimum Support Price for niger (Guizotia abyssinica) seeds.
  2. Niger is cultivated as a Kharif crop.
  3. Some tribal people in India use niger seed oil for cooking.

How many of the above statements are correct?

[amp_mcq option1=”Only one” option2=”Only two” option3=”All three” option4=”None” correct=”option3″]

This question was previously asked in
UPSC IAS – 2023
1. The Government of India provides Minimum Support Price for niger (Guizotia abyssinica) seeds. This statement is correct. Niger seed is one of the oilseeds for which the Minimum Support Price (MSP) is announced by the Government of India for both Kharif and Rabi seasons based on the recommendations of the Commission for Agricultural Costs and Prices (CACP).

2. Niger is cultivated as a Kharif crop. This statement is correct. Niger is predominantly a Kharif crop in India, sown with the onset of the monsoon (June-July) and harvested from September to November. It is primarily grown in states like Odisha, Chhattisgarh, Madhya Pradesh, Maharashtra, Andhra Pradesh, and Karnataka.

3. Some tribal people in India use niger seed oil for cooking. This statement is correct. Niger seed oil is edible and is traditionally used for cooking, especially by tribal populations and in rural areas where it is cultivated, due to its availability and nutritional properties. It is also used for other purposes like lighting and soap making.

All three statements are factually correct.

– Niger seed is covered under the Government of India’s MSP scheme.
– Niger is primarily grown during the Kharif season in India.
– Niger seed oil is used for cooking, including by some tribal communities.
Niger (also known as ramtil) is an important minor oilseed crop, particularly suited for cultivation on marginal lands and under rainfed conditions. It provides livelihood to farmers in hilly and tribal areas.

99. Which one of the following best describes the concept of ‘Small Farmer

Which one of the following best describes the concept of ‘Small Farmer Large Field’?

[amp_mcq option1=”Resettlement of a large number of people, uprooted from their countries due to war, by giving them a large cultivable land which they cultivate collectively and share the produce” option2=”Many marginal farmers in an area organize themselves into groups and synchronize agricultural operations” option3=”Many marginal farmers in an area together make a contract with a corporate body and surrender their land to the corporate body for a fixed term for which the corporate body makes a payment of agreed amount to the farmers” option4=”A company extends loans, technical knowledge and material inputs to a number of small farmers in an area so that they produce the agricultural commodity required by the company for its manufacturing process and commercial production” correct=”option2″]

This question was previously asked in
UPSC IAS – 2023
The concept of ‘Small Farmer Large Field’ (SFLF) refers to a model where small and marginal farmers, despite owning small, fragmented landholdings, come together and collectively manage or synchronize their agricultural operations to achieve the benefits of scale that would otherwise be available only to large farms. This collaboration can involve joint planning, bulk purchasing of inputs, collective use of machinery, synchronized planting and harvesting, and collective marketing of produce. This effectively creates a ‘large field’ effect in terms of operational efficiency, input costs, and market access, benefiting the individual small farmers.

Option A describes collective farming, possibly in a resettlement context, which isn’t the specific focus of the SFLF concept typically discussed in the context of existing marginal farmers.
Option C describes corporate farming or contract farming where farmers might lease out or surrender their land to a company, shifting control away from the farmers; SFLF aims at farmers retaining control and benefiting from collective action.
Option D describes contract farming where a company provides inputs and buys output, but it doesn’t necessarily involve the farmers pooling or synchronizing operations across their fields to create a large-scale operational unit.

Option B, where many marginal farmers organize into groups and synchronize operations, best captures the essence of SFLF, enabling them to overcome the limitations of small land size through collective action and economies of scale in farming practices.

– ‘Small Farmer Large Field’ is a model for small and marginal farmers.
– It involves farmers organizing into groups and synchronizing operations.
– The goal is to achieve economies of scale similar to large farms while retaining ownership/control.
The SFLF concept is often promoted as a way to improve productivity, reduce costs, and enhance marketability for small farmers in countries where land fragmentation is a significant challenge. Various models exist for implementing SFLF, ranging from simple coordination of activities to more formal farmer producer organizations (FPOs) that manage collective operations and marketing.

100. Consider the following markets: 1. Government Bond Market 2. Call Mone

Consider the following markets:
1. Government Bond Market
2. Call Money Market
3. Treasury Bill Market
4. Stock Market
How many of the above are included in capital markets?

[amp_mcq option1=”Only one” option2=”Only two” option3=”Only three” option4=”All four” correct=”option2″]

This question was previously asked in
UPSC IAS – 2023
Financial markets are broadly categorized into money markets and capital markets. Money markets deal with short-term instruments, typically with a maturity of one year or less, used for managing short-term liquidity needs. Capital markets deal with long-term instruments, including equity (shares) and debt with maturities greater than one year, used for long-term financing and investment.

1. **Government Bond Market:** Government bonds (like G-Secs) are typically issued with maturities ranging from 1 year to 30 years or even more. These are long-term debt instruments, making the government bond market a part of the **capital market**.
2. **Call Money Market:** This is a market where banks lend to and borrow from each other for very short periods, typically overnight or up to 14 days, to meet their reserve requirements. This is a part of the **money market**.
3. **Treasury Bill Market:** Treasury Bills (T-Bills) are short-term debt instruments issued by the government with maturities of less than one year (currently 91, 182, and 364 days in India). The T-Bill market is a part of the **money market**.
4. **Stock Market:** The stock market deals with equity shares, which represent ownership in a company. Shares are perpetual instruments and represent long-term capital for the company. The stock market is a part of the **capital market**.

Based on this classification, the Government Bond Market (1) and the Stock Market (4) are included in capital markets. This is a total of two markets.

– Capital markets deal with long-term financial instruments (equity and debt > 1 year).
– Money markets deal with short-term financial instruments (debt ≤ 1 year).
– Government Bonds and Stocks are long-term instruments traded in capital markets.
– Call Money and Treasury Bills are short-term instruments traded in money markets.
The capital market facilitates the mobilization of savings for long-term investments by corporations and governments. The money market provides liquidity to the financial system and facilitates the implementation of monetary policy.

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