UPSC Prelims 2019 · GS Paper I
Question 67: Economy and Social Development
Which of the following is issued by registered foreign portfolio investors to overseas investors who want to be part of the Indian stock market without registering themselves directly?
AnswerUPSC’s answer is (d).
Participatory Notes, or P-Notes, are issued by registered foreign portfolio investors to overseas investors who want exposure to the Indian stock market without registering directly with SEBI. A Certificate of Deposit and Commercial Paper are money-market instruments issued by banks and companies to raise short-term funds, and a promissory note is a written promise to pay a sum.
Why each option is right or wrong
- (a) A certificate of deposit is a short-term deposit instrument issued by banks.
- (b) Commercial paper is a short-term borrowing instrument of companies.
- (c) A promissory note is a written promise to pay, not this instrument.
- (d) Correct: participatory notes are issued by registered FPIs to overseas investors.
Answer: UPSC’s key. Explanation: written by UPSC Grade, not by UPSC.
Source: UPSC, Civil Services (Preliminary) Examination 2019, General Studies Paper I, Series A. The paper on upsc.gov.in.