SEBI:
The Securities and Exchange Board of India (SEBI) was established in 1988. It got a legal status in 1992. SEBI was primarily set up to regulate the activities of the merchant banks, to control the operations of mutual funds, to work as a promoter of the stock exchange activities and to act as a regulatory authority of new issue activities of companies. The SEBI was set up with the fundamental objective, ‘to protect the interest of investors in securities market and for matters connected therewith or incidental thereto.’

Functions of SEBI:
To regulate the business of the stock market and other securities market.
To promote and regulate the self regulatory organizations.
To prohibit fraudulent and unfair trade practices in securities market.
To promote awareness among investors and training of intermediaries about safety of market.
To prohibit insider trading in securities market.To regulate huge acquisition of shares and
takeover of companies.

Anti-dumping duty is a protectionist tariff that a domestic government imposes on foreign imports that it believes are priced below fair market value. Dumping is a process where a company exports a product at a price lower than the price it normally charges in its own home market. To protect local businesses and markets, many countries impose stiff duties on products they believe are being dumped in their national market.

Reserved Industries:
1.Nuclear Energy
2.Railways
3.Atomic Minerals

The Currency Deposit Ratio:
The Currency Deposit Ratio (cdr) is the ratio of money held by the public in currency to that they hold in bank deposits.
cdr = CU/DD.

If a person gets Re. 1 she will put Rs. 1/(1 + cdr) in her bank account and keep Rs. cdr/(1 + cdr) in cash.

It reflects people’s preference for liquidity. It is a  purely behavioral parameter which depends, among other things, on the seasonal pattern of expenditure. For example, CDR increases during the festive season as people convert deposits to cash balance for meeting extra expenditure during such periods.

High levels of income and wealth inequality – some economists argue that highly unequal societies also end up with a worsening fiscal position for the government. The uber-rich are liable for higher taxes in a progressive system (and top rate taxpayers in the UK clearly pay a high % of total revenues) but they also have an incentive to use all of the legal tax avoidance schemes open to them. At the bottom end of the labour market, if millions of people are in low-paid, insecure work, many will not earn enough to pay much in tax and even more may remain dependent on top-up welfare benefits, adding to the pressure on government spending.

Demographic pressures – these can affect the fiscal position too, for example an ageing population will cause an increase in government spending on the state pension; a fast-growing population (perhaps boosted by net inward migration) will also put more pressure on the government to fund essential public and merit goods.

Government inefficiency – if the state sector is relatively less efficient in supplying public services, then value for money will be lower and more will have to be spent in total to provide the cover that people need. Free market economists favour a smaller government sector with many activities outsourced or privatised to the private sector to supply.
High levels of government subsidy / financial support – over time, total government spending can rise because of the many competing demand placed upon politicians and the effects of lobbying by (often influential / powerful) pressure groups. In some countries, public spending is bloated by very generous systems of farm / food / energy subsidies that are politically hugely difficult to remove. The state might also get locked into providing financial support for loss-making businesses and industries such as airlines.

Masala Bonds:
‘Masala Bonds’ are Indian rupee denominated bonds issued in offshore capital markets which issued to offshore investors settled in dollars and, therefore, the currency risk resides with investors. It is used to refer to rupee-denominated borrowings by Indian entities in overseas markets.

The International Finance Corporation (IFC) the investment branch of the World Bank issued a 10-year, 10 billion Indian rupee bonds in November 2014 to increase foreign investment in India and mobilize international capital markets to support infrastructure development in the country.

Masala bond was the first Indian bond to get listed in London Stock Exchange. IFC named it Masala bonds to give a local flavour by calling to mind Indian culture and cuisine. Moreover, there are popular bonds name are there in the list Dim-Sum Bond of China and Samurai Bonds of Japan, Yankee of USA and the bulldog of UK.

The Tobin tax is a tax on spot currency conversions that was originally proposed with the intention of penalizing short-term currency speculation. Rather than a consumption tax paid by consumers, the Tobin tax was meant to apply to financial sector participants as a means of controlling the stability of a given country’s currency.

A ghetto tax is a term used to describe how people with low incomes pay higher prices for goods and services, particularly those living in poverty-stricken areas.

A sin tax is an excise tax specifically levied on certain goods deemed harmful to society, for example alcohol and tobacco, candies, drugs, soft drinks, fast foods, coffee, sugar, gambling etc.

(ii) faster growth in economy ;

(iii) reduction In income inequalities;

(iv) widespread development breaking the barrier of location specific and centers specific development ;

(v) global admiration and recognition ; reduction in poverty ;

(vi) likely increase in national income ;

(vii) increase in employment and income opportunities ;

(viii) help in more effective distribution of subsidies ;

(ix) helpful in implementation of social security schemes, such as old age pensions, window pensions and so on ;

(x) helpful in shifting to direct distribution of subsidies by way of crediting bank account of targeted beneficiary rather than indirect distribution of subsidies ;

(xi) helpful in plugging the leakage through distribution channels.

Major micro level benefits are :

(i) smoothing consumption ;

(ii) buffer against avoidable expenditure ;

(iii) safety of assets from major disruptions ;

(iv) better incomes ;

(v) rational utilization of saving ;

(vi) freedom from clutches of moneylenders;

(vii) increase in risk taking ability;

(viii) enlarges livelihood opportunities;

(ix) saving of time in collection of periodic social security payments by state and central governments ;

(x) improved self esteem and sense of elevation.

A debenture is one of the capital market instruments which is used to raise medium or long term funds from public. A debenture is essentially a debt instrument that acknowledges a loan to the company and is executed under the common seal of the company. The debenture document, called Debenture deed contains provisions as to payment, of interest and the repayment of principal amount and giving a charge on the assets of a such a company, which may give security for the payment over the some or all the assets of the company. Issue of Debentures is one of the most common methods of raising the funds available to the company. It is an important source of finance.

The most salient features of Debentures are as follows:

– A debenture acknowledges a debt
– It is in the form of certificate issued under the seal of the company (called Debenture Deed). It usually shows the amount & date of repayment of the loan.
– It has a rate of interest & date of interest payment.
– Debentures can be secured against the assets of the company or may be unsecured.
– Debentures are generally freely transferable by the debenture holder. Debenture holders have no rights to vote in the company’s general meetings of shareholders, but they may have separate meetings or votes e.g. on changes to the rights attached to the debentures.
– The interest paid to them is a charge against profit in the company’s financial statements.

Participatory Notes:
Participatory Notes or P-notes are offshore derivative instruments, used by Foreign Institutional Investors (FIIs) who are NOT registered with SEBI. The major characteristics of P-notes are:

– They are offshore derivative instruments
– They are used by Foreign Institutional Investors (FIIs) who are NOT registered with SEBI.
– They are used on Indian shares, but at a location outside of India.
– The above implies that FIIs who are not registered with SEBI but wish to take exposure in the Indian securities markets can use P-notes. Brokers buy or sell securities on behalf of their clients on their proprietary account and issue such notes in favour of such foreign investors. The P-note holder is entitled to all the dividends, capital gains and other payouts on the underlying securities. The brokerages or FIIs have to compulsorily report the P-note issuance status every quarter to SEBI. In doing so, the identity of the client or the final investor can be hidden.

Tikdam:
Wordplay:
Eliminate Statement 2. Institutional investors of foreign origin being registered with SEBI doesn’t seem very logical. They are most likely to be registered with their concerned local authorities.

Thus you are left with option A and C. Though statement 3 is very straight forward, still if you are doubtful about it, you still left with a 50:50 situation.

The unemployment rate is a measure of the prevalence of unemployment and it is calculated as a percentage by dividing the number of unemployed individuals by all individuals currently in the labor force. During periods of recession, an economy usually experiences a relatively high unemployment rate.

Tikdam:
Wordplay:
You are expected to know the full form of MUDRA if you have been following CA. So how can a Refinance agency be involved in direct lending? Thus, we can eliminate statement 1.

If you are doubtful about statement 2, still you are left with a 50:50 situation.