clearias-team-100

Consider the following statements in respect of the digital rupee:

1. It is a sovereign currency issued by the Reserve Bank of India (RBI) in alignment with its monetary policy.
2. It appears as a liability on the RBI’s balance sheet.
3. It is insured against inflation by its very design.
4. It is freely convertible against commercial bank money and cash.

Which of the statements given above are correct?

(a) 1 and 2 only
(b) 1 and 3 only
(c) 2 and 4 only
(d) 1, 2 and 4

Correct Answer: (d) 1, 2 and 4

Explanation:

• Statement 1 is correct. The digital rupee is a sovereign currency issued by the RBI.
• Statement 2 is correct. It appears as a liability on the RBI’s balance sheet.
• Statement 3 is incorrect. The digital rupee, like any currency, is not inherently insured against inflation.
• Statement 4 is correct. It is freely convertible against commercial bank money and cash.
• Possible Sources: RBI guidelines and monetary policy documents.

Consider the following statements:

Statement I: Syndicated lending spreads the risk of borrower default across multiple lenders.
Statement II: The syndicated loan can be a fixed amount/lump sum of funds, but cannot be a credit line.

Which one of the following is correct in respect of the above statements?

(a) Both Statement I and Statement II are correct and Statement II explains Statement I
(b) Both Statement I and Statement II are correct, but Statement II does not explain Statement I
(c) Statement I is correct, but Statement II is incorrect
(d) Statement I is incorrect, but Statement II is correct

Correct Answer: (c) Statement I is correct, but Statement II is incorrect

Explanation:

• Statement I is correct. Syndicated lending indeed spreads the risk of borrower default across multiple lenders.
• Statement II is incorrect. Syndicated loans can be structured as either a fixed amount/lump sum or a revolving credit line. Possible Sources: Banking and finance textbooks.

Consider the following statements:

Statement I: If the United States of America (USA) were to default on its debt, holders of US Treasury Bonds will not be able to exercise their claims to receive payment.
Statement II: The US government debt is not backed by any hard assets, but only by the faith of the Government.

Which one of the following is correct in respect of the above statements?

(a) Both Statement I and Statement II are correct and Statement II explains Statement I
(b) Both Statement I and Statement II are correct, but Statement II does not explain Statement I
(c) Statement I is correct, but Statement II is incorrect
(d) Statement I is incorrect, but Statement II is correct

Correct Answer: (d) Statement I is incorrect, but Statement II is correct

• In the event of a default, holders of US Treasury Bonds would still have legal claims to receive payments. Default means that the government is failing to meet its payment obligations as scheduled, but it does not nullify the legal claims of the bondholders. Bondholders could still pursue legal action or seek payment, although they may face delays or reduced payments.
• The US government debt is not backed by any hard assets, but only by the faith of the Government.
• US government debt, including Treasury Bonds, is backed by the “full faith and credit” of the US government, meaning it is a promise to repay based on the government’s ability to tax and print money, rather than being backed by physical assets like gold or land.
• Possible Sources: Economics and financial policy references.98

With reference to Corporate Social Responsibility (CSR) rules in India, consider the following statements:

1. CSR rules specify that expenditures that benefit the company directly or its employees will not be considered as CSR activities.
2. CSR rules do not specify minimum rights over virtual items spending on CSR activities.

Which of the statements given above is/are correct?

(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2

Correct Answer: (a) 1 only

Explanation:

• Statement 1 is correct. CSR rules in India specify that expenditures that benefit the company directly or its employees will not be considered as CSR activities.
• Statement 2 is incorrect and irrelevant. CSR rules do not address “rights over virtual items” as it is not pertinent to CSR activities.
  Possible Sources: Companies Act, 2013, and CSR rules and regulations in India.

With reference to the rule/rules imposed by the Reserve Bank of India treating foreign banks, consider the following statements:

1. There is no minimum capital requirement for wholly owned banking subsidiaries in India.
2. For wholly owned banking subsidiaries in India, at least 50% of the board members should be Indian nationals.

Which of the statements given above is/are correct?

(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2

Correct Answer: (b) 2 only

Explanation:

• Statement 1 is incorrect. There is a minimum capital requirement for wholly owned banking subsidiaries in India.
• Statement 2 is correct. RBI regulations require that at least 50% of the board members of wholly owned banking subsidiaries in India should be Indian nationals.
  Possible Sources: RBI guidelines and regulations on foreign banks.

Which one of the following words/phrases is most appropriately used to denote “an interoperable network of 3D virtual worlds that can be accessed simultaneously by millions of users, who can exert property rights over virtual items”?

(a) Big data analytics
(b) Cryptography
(c) Metaverse
(d) Virtual matrix

Correct Answer: (c) Metaverse

Explanation:
The term “metaverse” refers to an interoperable network of 3D virtual worlds that can be accessed simultaneously by millions of users, who can exert property rights over virtual items.
Possible Sources: Technology and digital media references.