1) Which of the following are parts of the famlus Monetary Policy Trilemma –
i. A floating foreign exchange rate
ii. Total capital account convertibility
iii. Independent Fiscal Policy
A. i, ii only
B. ii only
C.i, iii only
- Parts of Monetary Policy Trilemma –
i. A fixed foreign exchange rate
ii. free capital movement (absence of capital controls)
iii. an independent monetary policy
2) Which of the following correctly depicts the relationship between Bond Prices and Bond Yield –
A. As bond prices increase, bond yields increase
B. As bond prices increase, bond yields fall
C. Bond prices and bond yields don’t share any relationship
D. As bond prices decrease, bond yields fall
- Bond yield is the amount of return an investor realizes on a bond. Several types of bond yields exist.
Nominal yield is the interest paid divided by the face value of the bond. Current yield equals annual earnings of the bond divided by its current market price.
As bond prices increase, bond yields fall.
For example, assume an investor purchases a bond with a 10% annual coupon rate
- Each year, the bond pays 10%, or $100, in interest. Its annual yield is the interest
As $100 divided by $1,000 is 10%, the bond’s nominal yield is 10%, the same as its
- Eventually, the investor decides to sell the bond for $900.
The new owner of the bond receives interest based on the face value of the bond,11 1%.
- However, because he only paid $900 for .the bond, his rate of return is $100/$900 or If he sells the bond for a lower price, its yield increases again. If he sells for a higher price, its yield falls.
3) Which of the following is true about Market Stabilization Scheme (MSS) –
i. It helps in providing excess liquidity to market
ii. MSS Bonds are not included as a part of the country’s ‘internal Central Government debt’
A. i only
B. ii only
- Market Stabilization Scheme (MSS) –
i. It helps in liquidity absorption
ii. MSS Bonds are included as a part of the country’s ‘internal Central Government debt’
4) Which river of India is called Vridha Ganga?
5) Recently concluded 2+2 Dialogue with USA included –
i. External Affairs Minister of India
ii. Finance Minister of India
iii. Defence Minister of India
iv. Prime Minister of India
A. i & ii only
B. ii & iv only
C. i & iii only
D. All of the above