Forex Reserves of India and Forex Management

16. Which committee is responsible for advising the RBI on Forex Management?
a. Tarapore Committee
b. Reddy Committee
c. Raghuram Rajan Committee
d. Urjit Patel Committee

17. What is the purpose of hedging in Forex Management?
a. To eliminate the risk of exchange rate fluctuations
b. To maximize profits from currency speculation
c. To reduce transaction costs in foreign trade
d. To regulate capital outflows

18. What does the term “hot money” refer to in Forex Management?
a. Money earned through illegal means
b. Money invested in high-risk financial instruments
c. Short-term capital flows that can quickly move in and out of a country
d. Money used for speculative currency trading

19. Which of the following factors can impact the value of a country’s currency in the foreign exchange market?
a. Interest rates
b. Inflation levels
c. Economic indicators
d. All of the above

20. What is the purpose of capital account convertibility?
a. To restrict capital flows to and from a country
b. To promote foreign direct investment
c. To allow unrestricted movement of capital in and out of a country
d. To regulate currency exchange rates