UPSC Prelims 2025 · GS Paper I
Question 8: Economy and Social Development
Consider the following statements :
- IIndia accounts for a very large portion of all equity option contracts traded globally thus exhibiting a great boom.
- IIIndia’s stock market has grown rapidly in the recent past even overtaking Hong Kong’s at some point of time.
- IIIThere is no regulatory body either to warn the small investors about the risks of options trading or to act on unregistered financial advisors in this regard.
Which of the statements given above are correct?
AnswerThe answer is (a).
India accounts for a large majority of the world's equity options contracts by number traded, so statement I is correct. The country's stock market capitalisation overtook Hong Kong's in early 2024, making statement II correct. Statement III is wrong: SEBI is the regulator of securities and options trading. It has warned retail investors about the heavy losses most individual derivative traders suffer and has acted against unregistered investment advisers. Remember: SEBI regulates options trading and advice.
- I. India accounts for most equity option contracts traded worldwide.
- II. India's market capitalisation overtook Hong Kong's in early 2024.
- III. SEBI regulates options trading, warns investors and acts against unregistered advisers.
How you could have got this
- If you were sure statement III is not correct, (b), (c) and (d) go: each of them includes III.
What you needed to know: SEBI regulates options trading, warns investors and acts against unregistered advisers.
Only (a) is left. You didn’t need statements 1 or 2.
This follows an unofficial answer: UPSC has not published its key for this year, and if that answer is wrong, so is this path.
Which options go is worked out from UPSC’s key and the options, not by a model.
Why each option is right or wrong
- (a) Right: I and II are correct; III is wrong because SEBI exists for this purpose.
- (b) Wrong: III is false, so II and III cannot both hold.
- (c) Wrong: III is false, so I and III cannot both hold.
- (d) Wrong: III is false, so not all three are correct.
Explanation: written by UPSC Grade, not by UPSC.
Source: UPSC, Civil Services (Preliminary) Examination 2025, General Studies Paper I, Series A. The paper on upsc.gov.in.