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Daily Current Affairs
05 March, 2025
1. What is the primary objective of a Multi-Asset Allocation Fund (MAAF)?
A) To invest only in equity and fixed deposits
B) To maximize returns by focusing on a single asset class
C) To diversify across multiple asset classes and reduce risk
D) To provide short-term high-yield returns through speculation
E) To invest only in government securities
Answer: C) To diversify across multiple asset classes and reduce risk
Explanation: Multi-Asset Allocation Funds (MAAFs) invest in equity, debt, gold, real estate, and other assets to reduce risk and provide stable returns, particularly during market volatility.
2. What is the key concern regarding SEBI’s consultation paper on market regulations?
A) It bans trading in Nifty Bank stocks
B) It proposes changes that might reduce market manipulation risks
C) It increases speculative trading opportunities
D) It aims to remove all non-benchmark indices from trading
E) It mandates investors to hold only blue-chip stocks
Answer: B) It proposes changes that might reduce market manipulation risks
Explanation: SEBI’s proposed shift to delta-based open interest calculation and stricter regulations for non-benchmark indices aim to prevent market manipulation but raised concerns about possible impacts on trading volume.
3. What is the purpose of SEBI’s Mitraa platform?
A) To allow real-time stock trading
B) To assist investors in recovering lost or dormant mutual fund investments
C) To provide higher interest rates on mutual fund investments
D) To regulate private investment funds
E) To track high-frequency trading transactions
Answer: B) To assist investors in recovering lost or dormant mutual fund investments
Explanation: The Mitraa platform helps investors trace mutual fund units, especially those from pre-2006 that lack PAN linkage, using multiple identifiers such as PAN, phone numbers, and bank details.
4. How have India’s Free Trade Agreements (FTAs) impacted customs revenue?
A) They have increased customs duty collection
B) They have led to a revenue loss of ₹94,172 crore in FY25
C) They have prevented imports from ASEAN countries
D) They have reduced domestic market competition
E) They have increased import restrictions
Answer: B) They have led to a revenue loss of ₹94,172 crore in FY25
Explanation: FTAs with ASEAN, Japan, and the UAE have reduced tariff barriers, leading to significant customs revenue loss. Future FTAs with the US, EU, and UK may further impact revenue collection.
5. What concern did the IMF highlight in its Financial System Stability Assessment of India?
A) The excessive growth of fintech startups
B) The high exposure of NBFCs to power and infrastructure sectors
C) The decline in India’s GDP growth rate
D) The need for stricter capital controls
E) The collapse of the Indian stock market
Answer: B) The high exposure of NBFCs to power and infrastructure sectors
Explanation: The IMF raised concerns over NBFCs’ high exposure to power and infrastructure, along with their strong linkages to banks and financial markets, which could pose systemic risks.
6. Why is the RBI expected to cut the repo rate?
A) To increase liquidity in the banking system
B) To reduce inflationary pressures
C) To encourage foreign direct investment
D) To regulate stock market fluctuations
E) To strengthen the Indian Rupee
Answer: A) To increase liquidity in the banking system
Explanation: With slowing GDP growth and easing inflation, the RBI is likely to cut the repo rate to stimulate borrowing and spending. However, tight liquidity conditions could limit its effectiveness.
7. What is the primary reason behind Trump’s reciprocal tariff threat against India?
A) India’s reluctance to sign a new trade deal
B) India’s high tariff rates on imported goods
C) India’s excessive exports to the U.S.
D) India’s refusal to allow U.S. companies in domestic markets
E) The U.S.’s desire to dominate the Indian market
Answer: B) India’s high tariff rates on imported goods
Explanation: India imposes high tariffs on manufactured (13.4%) and agricultural goods (40%), making its trade system costly and complex. Trump’s threat aims to counterbalance these trade barriers.
8. What is a major regulatory concern if the U.S. government creates a strategic cryptocurrency reserve?
A) Increased centralization contradicts blockchain’s decentralized nature
B) Bitcoin will become the official U.S. currency
C) The Federal Reserve will lose control over monetary policy
D) Cryptocurrencies will no longer be used for international trade
E) The U.S. will ban all cryptocurrencies except its own digital dollar
Answer: A) Increased centralization contradicts blockchain’s decentralized nature
Explanation: A U.S. government-controlled crypto reserve challenges the fundamental principle of decentralization that underpins blockchain technology, leading to concerns over government overreach.
9. How might the establishment of a U.S. cryptocurrency reserve affect global financial systems?
A) It will increase demand for physical cash
B) It may trigger international competition in digital currencies
C) It will reduce interest in Central Bank Digital Currencies (CBDCs)
D) It will eliminate cryptocurrency mining globally
E) It will cause the U.S. stock market to crash
Answer: B) It may trigger international competition in digital currencies
Explanation: Countries like China and the EU may accelerate their adoption of CBDCs and digital asset policies to counterbalance the influence of a U.S.-held cryptocurrency reserve.
10. What potential long-term impact could the U.S. cryptocurrency reserve have on financial markets?
A) A decline in institutional confidence in cryptocurrencies
B) A ban on decentralized finance (DeFi) platforms
C) Increased mainstream acceptance of Bitcoin and other digital assets
D) A permanent price drop in Bitcoin and Ethereum
E) The replacement of the U.S. dollar with Bitcoin
Answer: C) Increased mainstream acceptance of Bitcoin and other digital assets
Explanation: The U.S. government holding cryptocurrency reserves could boost institutional confidence, leading to greater adoption of digital assets in mainstream finance.
