The question asks to identify the correct statements regarding 'IFC Masala Bonds'. We need to evaluate each statement individually based on our knowledge of these financial instruments and the institutions involved.
Correct Option: C) Both 1 and 2
Both statements are accurate. The International Finance Corporation (IFC) is a part of the World Bank Group, and it issues Masala Bonds. These bonds are indeed rupee-denominated, meaning they are issued in Indian Rupees, and they serve as a source of debt financing for both public and private sector entities in India, allowing them to raise capital from international markets while mitigating currency risk for the Indian borrower.
The question asks about the characteristics of Bitcoins. We need to evaluate each statement based on the fundamental principles of how Bitcoin and other cryptocurrencies operate.
B) 2 and 3 only. Statements 2 and 3 accurately describe features of Bitcoin, while statement 1 is incorrect because Bitcoin is decentralized and not tracked by central banks.
The question asks about a disadvantage of leveraged investment. Leveraged investment involves borrowing money to amplify potential returns. While it can magnify gains, it also comes with significant risks and potential downsides. We need to identify which of the given options is a common disadvantage.
A) Lack of transparency is a significant disadvantage of leveraged investment. The complex nature of leveraged products and the underlying financial structures can make it difficult for investors to fully understand the risks, assets, and liabilities involved, leading to hidden dangers and unexpected losses.
The question asks why a high saving economy might not see a significant increase in output despite capital formation. This points to a concept that links investment (from savings) to output growth. The key economic concept here is the efficiency of capital utilization.
The relationship between capital formation, savings, and output growth can be expressed by the Harrod-Domar model, where the growth rate of output (\(g\)) is given by:
\[ g = \frac{s}{\text{COR}} \]where \(s\) is the saving rate and \(\text{COR}\) is the capital-output ratio. If \(s\) is high but \(\text{COR}\) is also high, then \(g\) (growth in output) will not be significantly high.
D) High capital output ratio — A high capital-output ratio implies that more capital is required to produce a given unit of output. Therefore, even with high savings leading to significant capital formation, the increase in output will be limited if the capital is not efficiently utilized or if the production processes are inherently capital-intensive and inefficient. This directly explains why capital formation may not result in a significant increase in output.
The question asks to identify the WRONG statements about various forms of Foreign Direct Investment (FDI). We need to evaluate each given option to determine if it represents a valid form of FDI.
D) None of the above. All the listed options (a, b, c, and d) are indeed valid forms of Foreign Direct Investment (FDI). The question asks to identify the WRONG statements, and since all statements are correct, the answer is "None of the above".