BANKING AFFAIRS

Detailed explanation-1: -What is/are the characteristics of Hot money? (1) The term is used for fresh currency notes issued by the RBI. (2) It is the fund that flows in the market to take advantage of high-interest rates. (3) It is the fund which is thrown in the market to create an imbalance in the stock markets.

Detailed explanation-2: -Detailed Solution. Hot money is the flow of funds from one country to another in order to earn a short-term profit on interest rate differences. A global depositary receipt (GDR) is a bank certificate issued in more than one country for shares in a foreign company.

Detailed explanation-3: -"Hot money” refers to funds that are controlled by investors who actively seek short-term returns. These investors scan the market for short-term, high interest rate investment opportunities. A typical short-term investment opportunity that often attracts “hot money” is the certificate of deposit (CD).

Detailed explanation-4: -Types of hot money As mentioned above, capital in the following form could be considered hot money: Short-term foreign portfolio investments, including investments in equities, bonds and financial derivatives. Short-term foreign bank loans. Foreign bank loans with short term investment horizon.