PREVIOUS YEAR SOLVED PAPERS - June 2019
6. Which among the following institutions is NOT a part of World Bank group?
- Option : B
- Explanation : World Bank Group: The World Bank Group consists of five institutions: The International Bank for Reconstruction and Development (IBRD), the International Development Association (IDA), the International Finance Corporation (IFC), the International Centre for Settlement of Investment Disputes (ICSID), and the Multilateral Investment Guarantee Agency (MIGA). IBRD and IDA together are known as the World Bank. The term World Bank Group refers collectively to all five of the institutions. Although each institution has a distinct purpose, history and set of founding documents, they have a common commitment to reducing poverty, increasing shared prosperity, and promoting sustainable development.
IBRD: The International Bank for Reconstruction and Development aims to reduce poverty in middle-income countries and creditworthy poorer countries by promoting sustainable development through loans, guarantees, risk management products, and analytical and advisory services. Established in 1944 as the original institution of the World Bank Group, IBRD is structured like a cooperative that is owned and operated for the benefit of its 188 member countries. IBRD raises most of its funds on the world’s financial markets and has become one of the most established borrowers since issuing its first bond in 1947. The income that IBRD has generated over the years has allowed it to fund development activities and to ensure its financial strength, which enables it to borrow at low cost and offer clients good borrowing terms.
ICSID: The International Centre for Settlement of Investment Disputes provides international facilities for conciliation and arbitration of investment disputes.
IDA: The International Development Association is the part of the World Bank that helps the world’s poorest countries. Established in 1960, IDA aims to reduce poverty by providing loans (called ‘credits’), grants and guarantees for programs that boost economic growth, reduce inequalities, and improve people’s living conditions. IBRD and IDA share the same staff and headquarters and evaluate projects with the same rigorous standards.
IFC: The International Finance Corporation is the largest global development institution focused exclusively on the private sector. It helps developing countries achieve sustainable growth by financing investment, mobilizing capital in international financial markets, and providing advisory services to businesses and governments.
MIGA: The Multilateral Investment Guarantee Agency was created in 1988 to promote foreign direct investment into developing countries to support economic growth, reduce poverty and improve people’s lives. MIGA fulfills this mandate by offering political risk insurance and cred it enhancement to investors and lenders.
- Option : C
- Explanation : Skimming price is one of the strategies used by a firm when it introduces a new product in the market. In this strategy, the firm charges a very high price for the product and, later, gradually reduces the price. The reason for using this strategy is that the firm has incurred a substantial cost on development of the new product, and, before the competitors enter the market, the firm wants to take back the development cost. Once competition picks up in the market, the firm gradually reduces price. Though the sale volume would be low when skimming price is charged, the profit margin being high, the firm would be able to recoup its development cost.
- Option : D
- Explanation : Since the coefficient of correlation is the G.M. between the regression coefficients, therefore,
Since r has the same sign as the two regression coefficients, so r must be –ve.
Hence, r = –0.4.
9. Which one of the following is used for international money transfer?
- Option : C
- Explanation : SWIFT stands for: Society for Worldwide Interbank Financial Telecommunications. SWIFT is a Cooperative Society registered in May 1973 in Brussels, Belgium. In an era of information technology SWIFT offers unique message processing services and provides a very fast, accurate and authenticated transfer of financial messages on global basis. It is a cooperative society of international banks and operates a computerized telecommunication system , which allows rap id, economical, secure and accurate transmission system for essential financial data. SWIFT services enable the retail as well as corporate customers to transfer funds around the world.
10. Which among the following is NOT true about BASEL?
- A
Initially it was named as Committee of Banking Regulations and Supervisory Practices (CBRS)
- B
BASEL was established by the Central Bank Governors of fifteen countries
- C
It was established by the end of 1974
- D
Disturbances in international currency and banking markets were responsible for its establishment
