GK
INDIAN ECONOMY
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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black money
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white money
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a money which is hard to come but easy to go
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a money which comes easily and goes easily too
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Detailed explanation-1: -Hot money signifies currency that quickly and regularly moves between financial markets, that ensures investors lock in the highest available short-term interest rates. Hot money continuously shifts from countries with low-interest rates to those with higher rates.
Detailed explanation-2: -Foreign portfolio investment is the entry of funds into a country where foreigners deposit money in a country’s bank or make purchases in the country’s stock and bond markets. In FPI, the investor does not have direct control over the securities or businesses. Hot money is generally referred to as FPI.
Detailed explanation-3: -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.
Detailed explanation-4: -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.