QUIZ – 2020: Insights Current Affairs Quiz, 26 March 2020

Solution: b)

* Based on total percent of India’s foreign trade.

Solution: a)

SBI, ICICI Bank, and HDFC Bank continue to be identified as Domestic Systemically Important Banks (D-SIBs).

NBFCs whose asset size is of ₹ 500 cr or more as per last audited balance sheet are considered as systemically important NBFCs. The rationale for such classification is that the activities of such NBFCs will have a bearing on the financial stability of the overall economy.

Non-Banking Financial Companies are regulated by different regulators in India such as RBI, Irda, SEBI, National Housing Bank and Department of Company Affairs.

Solution: c)

Amid the all-round disruption caused to the economy by the novel coronavirus outbreak, a concern across the world is the possibility of loss of jobs. Various governments have unveiled various measures to address such concerns, and one of the most talked about is Kurzarbeit, Germany’s existing scheme that provides for partial compensation for a worker’s earnings in such situations, and now modified to account for the current crisis.

Kurzarbeit is German for “short-work”. The policy provides for a short-time work allowance, called kurzarbeitgeld, which partially compensates for lost earnings during uncertain economic situations.

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Solution: d)

When the soil is dry, plants become stressed and cannot absorb as much carbon dioxide as in the normal conditions. The capability of plants to act as carbon sink reduces.

Micro organisms in the dry soil becomes more productive, when the climate is hot and release more carbon dioxide.

Solution: d)

A sovereign bond is a specific debt instrument issued by the government. They can be denominated in both foreign and domestic currency. Just like other bonds, these also promise to pay the buyer a certain amount of interest for a stipulated number of years and repay the face value on maturity. They also have a rating associated with them which essentially speaks of their credit worthiness.

The Yield of the sovereign bond is the interest rate that the government pays on issuing bonds. Countries with volatile economies and high inflation rates have to issue higher interest returns on their bonds compared to more stable ones.
The Yield of the bonds are dependent on primarily 3 factors:
• Creditworthiness – The issuing countries’ perceived ability to repay their debts. This can be obtained from rating agencies.
• Country Risk – External/Internal factors like unrest and wars tend to jeopardize a country’s ability to pay off their debts.
• Exchange Rates- In cases where bonds are issued in foreign currency, fluctuations in exchange rate may lead to increased pay out pressure on the issuing government.
The central banks also control the supply of money within the economy by the use of these bonds. When the government is in expansionist mode, the central bank will back debt in exchange for cash to raise capital for the expenditure. In case it is in the contracting mode, the banks hope to slow growth by selling more securities to take out liquidity from the system.

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