Daily Current Affairs Quiz: October 31, 2025

Answer: C [1, 2 and 4 only ]
Explanation:

Statement 1 is correct: Government securities (G-Secs) are debt instruments issued by the Central or State Governments to raise funds. These include Treasury Bills (T-Bills) for short-term borrowing and Government Bonds for long-term borrowing.

Statement 2 is correct: G-Secs are considered risk-free as they carry a sovereign guarantee – the government’s full faith and credit ensure repayment of principal and interest. Hence, they are often referred to as “gilts” or “gilt-edged securities.”

Statement 3 is incorrect: Investment in Government Securities is not limited to institutional investors. The RBI Retail Direct Scheme (2021) allows individual investors (retail participants) to buy and sell G-Secs directly through the RBI’s online portal. Thus, participation is open to both institutional and retail investors.

Statement 4 is correct:The Reserve Bank of India (RBI) acts as the debt manager and regulator of the Government Securities Market. It issues securities on behalf of the government, manages public debt, and ensures liquidity and transparency in the market.

Answer: B [1 and 3 only ]
Explanation:

Statement 1 is correct: When Foreign Portfolio Investment (FPI) inflows increase, foreign investors purchase Indian assets (like equities or bonds), leading to higher demand for the Indian Rupee to complete these transactions. This puts upward pressure on the Rupee’s exchange rate, causing it to appreciate in the short term.

Statement 2 is incorrect: The regulatory framework for FPI is less stringent compared to Foreign Direct Investment (FDI). FPIs involve short-term investments in financial markets (e.g., shares, bonds) without management control. FDIs involve long-term investments with ownership and control in companies and hence face more regulatory scrutiny under FEMA and DPIIT norms.

Statement 3 is correct: FPIs are important participants in India’s corporate debt market. Their investments enhance liquidity, deepen market participation, and help in the development of the corporate bond market by diversifying the investor base.

Answer: A [Only one ]
Explanation:

Statement 1 is incorrect: Commodity markets do not trade only in agricultural products. They include both:

1. Agricultural commodities (like wheat, cotton, coffee), and
2. Non-agricultural commodities such as metals (gold, silver, copper) and energy products (crude oil, natural gas).

Statement 2 is correct: Gold is a major traded commodity in the commodity markets. It is listed on exchanges such as the Multi Commodity Exchange (MCX) in India and is treated as a non-agricultural commodity. Thus, gold is indeed a tradable commodity.

Statement 3 is incorrect: Commodity derivatives include both futures and options contracts. For example, on MCX and NCDEX, traders can use commodity options (introduced by SEBI in 2017) as well as futures contracts to hedge or speculate. Hence, the statement is factually wrong.

Answer: C [Only three ]
Explanation:

Statement 1 is correct: Treasury Bills (T-Bills) are short-term government securities issued by the RBI on behalf of the Government of India to meet short-term liquidity needs. They are pure money market instruments with maturities of 91, 182, or 364 days.

Statement 2 is correct: Commercial Papers (CPs) are unsecured, short-term promissory notes issued by corporations to raise funds for working capital requirements. They are typically issued for periods ranging from 7 days to 1 year and are a key part of the money market.

Statement 3 is correct: Certificates of Deposit (CDs) are negotiable money market instruments issued by banks and financial institutions. They represent a time deposit and are used by banks to mobilize short-term funds.

Statement 4 is incorrect: Equity shares represent ownership in a company and are traded in the capital market, not the money market. The capital market deals with long-term instruments, while the money market deals with short-term (≤1 year) instruments.

Answer: D [Customized agreement between two parties with flexibility in terms ]
Explanation:

1. Futures contracts are standardized agreements traded on organized exchanges, not customized deals.
2. They create a binding obligation on both parties to buy or sell the underlying asset at a predetermined price on a future date.
3. All contract terms such as quantity, quality, and expiry are fixed by the exchange, ensuring uniformity.
4. Futures are marked-to-market daily, meaning profits or losses are settled every trading day based on price movements.
5. In contrast, customized and flexible agreements are features of forward contracts, not futures.