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Answer: C

Explanation:
Masala Bonds are a type of bond that allows Indian entities to raise money from foreign markets in Indian rupees, rather than in foreign currency.

The regulatory framework for Masala Bonds is governed by the Reserve Bank of India (RBI) and the Securities and Exchange Board of India (SEBI). The RBI has issued guidelines for the issuance of Masala Bonds, which include requirements for the issuer, the issue size, and the maturity period. SEBI has also issued regulations for the listing and trading of Masala Bonds on Indian stock exchanges.

Hence, C is the correct answer.

Answer: D

Explanation:
M1 and M2 are known as narrow money. M3 and M4 are known as broad money. These measures are in decreasing order of liquidity.

Broad Money is made up of currency with the public, current deposits with the banking system, savings deposits with the banking system, certificates of deposit issued by banks, term deposits of residents with the banking system, call/term borrowings from ‘non–depository’ financial corporations by the banking system, And ‘Other’ deposits with the RBI, as well as demand and time deposit of the post office.

Hence, Answer is D.

Theme – Money supply.

Answer: B

Explanation:
Hedging is a risk management strategy used in economics to reduce or mitigate potential losses. It involves taking a position in a security or asset that offsets the risk of an adverse price movement in another investment or exposure.

In simpler terms, hedging is like buying insurance to protect against potential losses. By taking a hedging position, investors or businesses can reduce their exposure to risk and minimize potential losses.

Hence, the answer is B.

Derivation refers to the process of obtaining or creating something from a source. In finance, derivation can refer to the creation of a new financial instrument or product from an existing one. However, it is not directly related to risk management or reducing potential losses. Hence, Option A is incorrect.

Leveraging refers to the use of debt or borrowed capital to increase potential returns on an investment. While leveraging can amplify potential gains, it also increases the risk of potential losses. It is not a strategy for reducing risk. Option C is incorrect.

Securitization is the process of packaging assets, such as loans or mortgages, into tradable securities. This allows investors to buy and sell these securities, providing liquidity to the market. While securitization can help manage risk by spreading it across multiple investors, it is not a strategy for reducing risk in the same way that hedging is. Hence, Option D is incorrect answer.

Theme: Capital market.

Answer: B

Explanation:
Investors who invest a large sum of money in a company's IPO to help stabilize its share price.

Anchor investors are typically large institutional investors, such as pension funds, sovereign wealth funds, or insurance companies. When a company goes public through an Initial Public Offering (IPO), anchor investors invest a significant amount of money in the company’s shares.

By investing in the IPO, anchor investors help to reduce the risk of price volatility and provide a level of comfort to other investors. This, in turn, helps to ensure a successful IPO and a stable start to the company’s life as a publicly traded entity.

Hence, Answer B is correct.

Option A is incorrect as anchor investors typically invest in a company's IPO for the long-term, rather than for short-term gains. They often have a lock-in period, during which they cannot sell their shares, which further emphasizes their long-term commitment.

Option C is incorrect as anchor investors typically invest in companies that are going public through an IPO, rather than in private start-ups. Investing in start-ups in exchange for equity is more characteristic of venture capitalists or angel investors.

Option D is incorrect as anchor investors typically invest a large sum of money in a single company's IPO, rather than spreading their investments across a range of assets. This type of investment strategy is more characteristic of portfolio managers or asset allocators who seek to diversify their investments to minimize risk.

Theme: Stock market and its terms.

Answer: B

Explanation:
Statement 1 is incorrect as Nominal GDP is calculated using current prices and it is not adjusted for inflation. Constant prices are used to calculate Real GDP. Nominal GDP is calculated using the prices that are current in the year in which the output is produced. This means that it takes into account all the changes that occurred in the prices of goods and services produced during the year. As a result, nominal GDP reflects not only changes in the quantity of goods and services produced, but also changes in their prices. For instance, if prices increase from one period to the next, but the output remains constant, the nominal GDP would still increase, even though the actual output did not change.

Statement 2 is correct as Real GDP is indeed the inflation-adjusted GDP of a country, which reflects the value of all goods and services produced by an economy in a given year. Real GDP represents the total value of all final goods and services produced by an economy during a given year, adjusted for inflation. Unlike nominal GDP, which reflects current prices, real GDP is calculated using the prices of a selected base year. This approach enables economists to distinguish between changes in the quantity of goods and services produced and changes in their prices due to inflation.

To calculate real GDP, the impact of inflation on nominal GDP since the base year must be determined and then removed. This process, known as “deflating” nominal GDP, ensures that real GDP accurately reflects changes in the economy’s output, rather than just price fluctuations. As a result, real GDP provides a more accurate picture of an economy’s growth and productivity over time.

Theme: GDP: Nominal and Real GDP.