Which of the following is/are the benefits of the Fund of Fund (FoF)?

A Fund of Fund (FoF) invests in other funds and offers diversification by investing across various sectors, locations, and asset classes. It allows small investors to access high-performing funds that may otherwise require significant capital. FoFs are professionally managed, reducing the burden on individual investors, though they are not managed by SEBI. By spreading investments across multiple funds, FoFs also help reduce risk. Therefore, statements 1, 2, and 4 are correct.

Does India meet all of its fertiliser requirements through domestic production?

No. India is one of the world's largest importers of fertilisers. Countries such as China, Russia, and Morocco are major exporters. Fertiliser was one of the '3 Fs' identified by Finance Minister Nirmala Sitharaman, alongside fuel and foreign exchange to buy gold. Fertilisers can be applied in both solid and liquid forms depending on crop, soil conditions, and irrigation methods. Therefore, only statement 2 is correct.

Does India have sufficient domestic solar cell manufacturing capacity to meet demand?

No. India currently lacks sufficient domestic solar cell manufacturing capacity to meet rapidly growing solar installation demand. Although annual solar module production is around 60–65 GW, solar cell manufacturing capacity is only about 30 GW. India added around 45 GW of solar capacity during 2025-26. Therefore, only statement 2 is correct.

What factors are considered while calculating the current account deficit or surplus?

Current account calculations include trade flows, services exports, remittances, and investment income. Foreign Direct Investment (FDI) inflows are not part of the current account; they belong to the capital or financial account. Therefore, trade flows, remittances, and services exports are considered for current account deficit or surplus calculations.

What does leverage mean in finance?

In finance, leverage refers to borrowing money to amplify the return from an investment. For example, if an investor borrows additional funds and invests them alongside personal capital, any gains or losses are magnified. The RBI's Foreign Currency Non-Resident (Bank) deposit swap scheme can allow NRIs to benefit from leverage by borrowing at lower foreign interest rates and investing in FCNR(B) deposits that offer higher returns.

Daily UPSC Prelims MCQs - Economy - 15th June 2026

Jigyashu Mishra
Jun 15
1 min read

Updated: Jun 22

Test your UPSC CSE 2027 preparation with today’s Economy (Every Monday) Quiz — coverings Fund of Fund (FoF), calculating the current account deficit/surplus, leverage refers to and more.

Previous UPSC Economy Quiz

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Daily UPSC Prelims MCQs - Economy - 15th June 2026

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