Q1. Regarding ‘Cyprus’, which statement is accurate?
(a) Cyprus is a landlocked country in Southeast Europe.
(b) The island is divided into two separate entities, the Republic of Cyprus and the Turkish Republic of Northern Cyprus.
(c) Cyprus is the largest island in the Mediterranean Sea.
(d) Cyprus gained independence from Greece in the 21st century.
Ans: (b)
Explanation:
- Context: An investigative report (called Cyprus Confidential) by The Indian Express and ICIJ, exposes Cyprus as a favoured location for global wealthy individuals engaging in tax evasion and money laundering.
- Option A: This statement is incorrect. Cyprus is not landlocked; it is an island located in the Eastern Mediterranean.
- Option B: This statement is correct. Cyprus has been divided since 1974, with the southern part of the island being the internationally recognized Republic of Cyprus, and the northern part being the self-declared Turkish Republic of Northern Cyprus. The division resulted from a military intervention by Turkey.
- Option C: This statement is accurate. Cyprus is the third-largest island in the Mediterranean Sea, after Sicily and Sardinia.
- Option D: This statement is incorrect. Cyprus gained independence from British rule, not Greece, in 1960. It did not gain independence in the 21st century.
Q2. Consider the following pairs (Military Exercises – Countries Involved):
- Indra: India and Russia
- Yudh Abhyas: India and USA
- Hand-in-Hand: India and China
How many of the above pairs are correctly matched?
(a) Only one
(b) Only two
(c) All three
(d) None
Ans: (c)
Explanation:
- Exercise Name : Countries Involved
- Military Exercises
- Indra India-Russia
- Yudh Abhyas India-USA
- Hand-in-Hand India-China
- Shakti India-France
- Mitra Shakti India-Sri Lanka
- Sampriti India-Bangladesh
- Surya Kiran India-Nepal
Q3. “Rapid Financing Instrument” and “Rapid Credit Facility” are related to the provisions of lending by which one of the following?
(a) Asian Development Bank
(b) International Monetary Fund
(c) United Nations Environment Programme Finance Initiative
(d) World Bank
Ans: (b)
Explanation:
- “Rapid Financing Instrument” and “Rapid Credit Facility” are related to the provisions of lending by the International Monetary Fund (IMF).
Q4. With reference to the “G20 Common Framework”, consider the following statements:
- It is an initiative endorsed by the G20 together with the Paris Club.
- It is an initiative to support Low Income Countries with unsustainable debt.
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
Ans: (c)
Explanation:
- Statement 1 is correct: Initiative endorsed by G20 together with Paris Club.
- Statement 2 is correct: It is an initiative to support low income countries with unsustainable debt.
Q5. With reference to the India economy, what are the advantages of “Inflation-Indexed Bonds (IIBs)”?
- Government can reduce the coupon rates on its borrowing by way of IIBs.
- IIGs provide protection to the investors from uncertainty regarding inflation.
- The interest received as well as capital gains on IIBs are not taxable.
How many of the above statements are correct?
(a) Only one
(b) Only two
(c) All three
(d) None
Ans: (b)
Explanation:
- Only statements 1 and 2 are correct.
- S1: Since these bonds provide no risk of capital loss, it can offer a lesser rate of interest (coupon) as interest is directly proportional to risk.
- S2: Inflation indexed bonds provide protection to investors from uncertainty regarding inflation.
- S3: Interest or inflation compensation both are taxable. There is no special treatment for these bonds.
