The 'Sovereign Wealth Fund' is a state-owned investment fund that invests in: MCQ with Answer and Explanation

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The 'Sovereign Wealth Fund' is a state-owned investment fund that invests in:

A. only gold

B. only domestic infrastructure

C. only government bonds

D. various financial assets including equities and real estate

Answer: Option D

Solution (By JKSSB Mock Tests)

Sovereign wealth funds invest in financial assets such as equities, bonds and real estate.

This question belongs to: Economy GK Economy Set 1

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Practice More Economy Set 1 Questions

Question #1

Which of the following is a characteristic of a developed financial market?

A. Limited participation of institutions

B. Low liquidity

C. High transaction costs

D. Wide range of financial instruments

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Correct Answer: Option D

Explanation:
Developed financial markets offer a wide range of instruments, high liquidity, low transaction costs and broad institutional participation.

This question belongs to: Economy GK Economy Set 1

Question #2

Which of the following is a feature of the 'Modigliani-Miller Theorem'?

A. In perfect capital markets, the value of a firm is independent of its capital structure

B. Dividend policy always affects firm value

C. Capital structure is the only determinant of firm value

D. The value of a firm always rises with higher leverage

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Correct Answer: Option A

Explanation:
The Modigliani-Miller theorem asserts that, under perfect capital markets (no taxes, no bankruptcy costs, no asymmetric information), the total value of a firm is independent of whether it is financed by debt or equity.

This question belongs to: Economy GK Economy Set 1

Question #3

In the context of measuring economic progress, the 'Genuine Progress Indicator' attempts to:

A. Measure only market production

B. Adjust GDP by subtracting environmental and social costs and adding non-market benefits

C. Replace GDP with only environmental indicators

D. Ignore all non-market activities

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Correct Answer: Option B

Explanation:
The Genuine Progress Indicator starts from personal consumption expenditure and then adjusts for factors such as income distribution, environmental degradation, and the value of unpaid work to provide a broader measure of welfare.

This question belongs to: Economy GK Economy Set 1

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