Set A - UPSC Prelims 2025 Solutions

QQuestion

Consider the following statements : I. India accounts for a very large portion of all equity option contracts traded globally thus exhibiting a great boom. II. India's stock market has grown rapidly in the recent past even overtaking Hong Kong's at some point of time. III. There is no regulatory body either to warn the small investors about the risks of options trading or to act on unregistered financial advisors in this regard. Which of the statements given above are correct?

OOptions

A) I and II only

B) II and III only

C) I and III only

D) I, II and III

✓Correct Answer

A) I and II only

DDalvoy Solutions

Analyzing statements about India's stock market and options trading:

I. India accounts for a very large portion of all equity option contracts traded globally: Correct. India has become one of the largest markets for equity options trading globally, with the NSE being among the top derivatives exchanges worldwide by volume.

II. India's stock market has grown rapidly and even overtaken Hong Kong's at some point: Correct. India's stock market capitalization has indeed grown rapidly and has overtaken Hong Kong's market cap at various points, reflecting the strong performance of Indian equities.

III. There is no regulatory body to warn small investors about risks or act on unregistered financial advisors: Incorrect. SEBI (Securities and Exchange Board of India) actively regulates the market, issues investor warnings about risky trading practices, and takes action against unregistered financial advisors and market manipulators.

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SUPSC Prelims Strategy and Tips

For capital market questions, recognize India's growing prominence in global derivatives trading while acknowledging the strong regulatory framework that exists to protect investors.

SUPSC Prelims 2025 Syllabus Analysis

Economics - Capital markets and derivatives trading

AUPSC Prelims 2025 Question Analysis

Medium difficulty - requires knowledge of current market developments and regulatory structure

Question 8

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