Why is the Government of India disinvesting its equity in the Central Public Sector Enterprises (CPSEs)?

  1. The Government intends to use the revenue earned from the disinvestment mainly to pay back the external debt.
  2. The Government no longer intends to retain the management control of the CPSEs.

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



Both Foreign Direct Investment (FDI) and Foreign Institutional Investor (FII) are related to investment in a country. Which one of the following statements best represents an important difference between the two?

(a) FII helps bring better management skills and technology, while FDI only brings in capital.

(b) FII helps in increasing capital availability in general, while FDI only targets specific sectors.

(c) FDI flows only into the secondary market, while FII targets primary market.

(d) FII is considered to be more stable than FDI.




Which of the following would include Foreign Direct Investment in India?

  1. Subsidiaries of foreign companies in India.
  2. Majority foreign equity holding in Indian companies.
  3. Companies exclusively financed by foreign companies.
  4. Portfolio investment.

Select the correct answer using the codes given below.

(a) 1, 2, 3 and 4

(b) 2 and 4 only

(c) 1 and 3 only

(d) 1, 2 and 3 only




What does venture capital mean?

(a) A short-term capital provided to industries.

(b) A long-term start-up capital provided to new entrepreneurs.

(c) Funds provided to industries at times of incurring losses.

(d) Funds provided for replacement and renovation of industries.




With reference to `IFC Masala Bonds’, sometimes seen in the news, which of the statements given below is/are correct?

  1. The International Finance Corporation, which offers these bonds, is an arm of the World Bank.
  2. They are the rupee-denominated bonds and are a source of debt financing for the public and private sector.

Select the correct answer using the code given below.

(a) 1 only

(b) 2 only

(c) Both 1 and 2

(d) Neither 1 nor 2

Solution: C


  1. Recently, India’s first ‘National Investment and Manufacturing Zone’ was proposed to be set up in

(a) Andhra Pradesh

(b) Gujarat

(c) Maharashtra

(d) Uttar Pradesh

Solution: A



With reference to ‘National Investment and Infrastructure Fund’,

which of the following statements is/are correct?

1. It is an organ of NITI Aayog.

2. It has a corpus of Rs. 4,00,000 crore at present.

Select the correct answer using the code given below:

(a)1 only

(b)2 only

(c)Both 1 and 2

(d)Neither 1 nor 2




Despite being a high saving economy, capital formation may not result in significant increase in output due to

(a)weak administrative machinery


(c)high population density

(d)high capital-output ratio




Which of the following is issued by registered foreign portfolio investors to overseas investors who want to be part of Indian stock market without registering themselves directly?

(a)Certificate of Deposits

(b)Commercial Paper

(c)Promissory Note

(d)Participatory Note




With reference to Foreign Direct Investment in India, which one of the following is considered its major characteristic ?

(a) It is the investment through capital instruments essentially in a listed company.

(b) It is largely non-debt creating capital flow.

(c) It is the investment which involves debt-servicing.

(d) It is the instrument made by foreign institutional investors in the Government securities.

Answer: B


With reference to Trade-Related Investment Measures (TRIMS), which of the following statements is/are correct ?

1. Quantitative restrictions on imports by foreign investors are prohibited.

2. They apply to investment measures related to trade in both goods and services.

3. They are not concerned with the regulation of foreign investment.

Select the correct answer using the code given below:

(a) 1 and 2 only

(b) 2 only

(c) 1 and 3 only

(d) 1,2 and 3

Answer: C


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