SSC Economics Sample Paper NCERT Sample Paper-4

  • question_answer
    India's market regulator SEBI is on course to relax investment norms for sovereign wealth funds, the investment vehicles which are directly controlled by the government of a country. The main reason behind this move is:

    A)  The desire of the Government of India to attract more foreign investment

    B)  Pressure by foreign Governments on India to execute specific mutual agreements on financial services

    C)  SEBI's desire to create a more level playing field for foreign investors

    D)  RBI's relevant directive to SEBI

    Correct Answer: A

    Solution :

    [a] SWF is defined as a special purpose investment funds or arrangements, owned by the Central government and created for macroeconomic purposes. SWFs hold, manage, or administer assets to achieve financial objectives, and employ a set of investment strategies including investments in foreign financial assets. There are more than 30 such funds in the world. SWFs are a way to improve the country's finances as well as hedge against future crises and are commonly established out of balance of payments surpluses, official foreign currency operations, the proceeds of privatizations, fiscal surpluses, and/or receipts resulting from commodity exports.

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