Which of the following state- ments is/are correct ? 1. NIFTY is based upon 50 firms in India. 2. NIFTY is governed and regulated by the Reserve Bank of India. 3. NIFTY does not trade in mutual funds. Select the correct answer using the codes given below

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Submitted by examrobotsa on

Q: 6 (CDS-I/2012)
Which of the following state- ments is/are correct ?
1. NIFTY is based upon 50 firms in India.
2. NIFTY is governed and regulated by the Reserve Bank of India.
3. NIFTY does not trade in mutual funds.

Select the correct answer using the codes given below :

question_subject: 

Economics

question_exam: 

CDS-I

stats: 

0,34,86,64,7,15,34

keywords: 

{'nifty': [0, 0, 0, 1], 'mutual funds': [0, 0, 0, 2], 'reserve bank': [1, 0, 3, 4], 'firms': [0, 0, 0, 4], 'india': [8, 1, 7, 13]}

The correct answer is option 4: 1 and 3.

Let`s break down each statement to understand why this is the correct answer:

1. NIFTY is based upon 50 firms in India: This statement is correct. NIFTY is a stock market index that represents the performance of the top 50 companies listed on the National Stock Exchange of India (NSE).

2. NIFTY is governed and regulated by the Reserve Bank of India: This statement is incorrect. The Reserve Bank of India (RBI) is the central banking institution in India responsible for monetary policy and regulation of the banking sector. However, NIFTY is governed and regulated by the NSE and its index committee.

3. NIFTY does not trade in mutual funds: This statement is correct. NIFTY is not a mutual fund itself, but an index that tracks the performance of certain stocks. Mutual funds can be created to replicate the performance of NIFTY, but the index itself does not directly trade in mutual funds.

In summary, statement 1 is correct as NIFTY is indeed based on 50 firms, while statement 2 is incorrect as NIFTY is governed by the NSE, not the Reserve Bank of India. Statement 3 is correct