{"id":1733,"date":"2024-03-29T14:02:43","date_gmt":"2024-03-29T08:32:43","guid":{"rendered":"https:\/\/lotusarise.com\/qna\/?p=1733"},"modified":"2024-04-03T07:14:39","modified_gmt":"2024-04-03T01:44:39","slug":"q-which-of-the-following-is-issued-by-registered-foreign-portfolio-investors-to-overseas-investors-who-want-to-be-part-of-the-indian-stock-market-without-registering-themselves-directly","status":"publish","type":"post","link":"https:\/\/lotusarise.com\/qna\/upsc\/q-which-of-the-following-is-issued-by-registered-foreign-portfolio-investors-to-overseas-investors-who-want-to-be-part-of-the-indian-stock-market-without-registering-themselves-directly","title":{"rendered":"Q. Which of the following is issued by registered foreign portfolio investors to overseas investors who want to be part of the Indian stock market without registering themselves directly?"},"content":{"rendered":"\n<ul class=\"mcq wp-block-list\">\n<li>Certificate of Deposit<\/li>\n\n\n\n<li>Commercial Paper<\/li>\n\n\n\n<li>Promissory Note<\/li>\n\n\n\n<li>Participatory Note<\/li>\n<\/ul>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p class=\"wp-block-paragraph\"><strong>Answer: (c) Promissory Note<\/strong><\/p>\n<\/blockquote>\n\n\n\n<h5 class=\"wp-block-heading\" id=\"notes-hd-66066c5d668b5\">Notes:<\/h5>\n\n\n\n<ul class=\"wp-block-list\">\n<li>A\u00a0<strong>Participatory Note or P-note is an instrument issued by a registered Foreign Institutional Investor (FII) to an overseas investor who wishes to invest in Indian stock markets without registering themselves with the market regulator<\/strong>, the Securities and Exchange Board of India (SEBI).\n<ul class=\"wp-block-list\">\n<li>The increase in P-notes investment is in line with the&nbsp;<strong>higher net inflows of Foreign Portfolio Investors (FPIs) in the cash segment.<\/strong><\/li>\n<\/ul>\n<\/li>\n\n\n\n<li>A&nbsp;<strong>Certificate of Deposit is a savings certificate with a fixed maturity date and specified fixed interest rate&nbsp;<\/strong>that can be issued in any denomination aside from minimum investment requirements.<\/li>\n\n\n\n<li><strong>Commercial Paper is an unsecured money market instrument issued in the form of a Promissory Note<\/strong>. It was introduced in India in 1990 with a view&nbsp;<strong>to enable highly rated corporate borrowers to diversify their sources of short-term borrowings<\/strong>&nbsp;and to provide an additional instrument to investors.<\/li>\n\n\n\n<li>A Promissory Note is a financial instrument that contains a&nbsp;<strong>written promise by one party (the note\u2019s issuer or maker) to pay another party&nbsp;<\/strong>(the note\u2019s payee) a definite sum of money, either on demand or at a specified future date.<\/li>\n<\/ul>\n\n\n\n<h6 class=\"wp-block-heading\" id=\"foreign-portfolio-investment\">Foreign Portfolio Investment<\/h6>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Foreign portfolio investment (FPI)<\/strong>\u00a0consists of securities and other financial assets<strong>&nbsp;passively held by foreign investors.<\/strong>\n<ul class=\"wp-block-list\">\n<li>It does<strong>&nbsp;not provide the investor with direct ownership<\/strong>&nbsp;of financial assets and is relatively liquid depending on the volatility of the market.<\/li>\n\n\n\n<li>Foreign portfolio investment is&nbsp;<strong>part of a country\u2019s capital account<\/strong>&nbsp;and is&nbsp;<strong>shown on its Balance of Payments (BOP).<\/strong><\/li>\n\n\n\n<li>The BOP measures the&nbsp;<strong>amount of money flowing from one country to other<\/strong>&nbsp;countries over one monetary year.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li>The investor<strong>&nbsp;does not actively manage<\/strong>&nbsp;the investments through FPIs, he does<strong>&nbsp;not have control over the securities or the business.<\/strong>&nbsp;However, since the investor\u2019s goal is to create a quick return on his money, FPI is more liquid and&nbsp;<strong>less risky than Foreign Direct Investment (FDI).<\/strong><\/li>\n\n\n\n<li>In contrast, FDI lets an investor purchase a direct business interest in a foreign country. The investor\u2019s goal is to create a long-term income stream while helping the company increase its profits.<\/li>\n\n\n\n<li>The investor controls his monetary investments and actively manages the company into which he puts money. However, because the investor\u2019s money is tied up in a company, he faces less liquidity and more risk when trying to sell his interest.<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Answer: (c) Promissory Note Notes: Foreign Portfolio Investment<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_kad_blocks_custom_css":"","_kad_blocks_head_custom_js":"","_kad_blocks_body_custom_js":"","_kad_blocks_footer_custom_js":"","_kad_post_transparent":"","_kad_post_title":"","_kad_post_layout":"","_kad_post_sidebar_id":"","_kad_post_content_style":"","_kad_post_vertical_padding":"","_kad_post_feature":"","_kad_post_feature_position":"","_kad_post_header":false,"_kad_post_footer":false,"_kad_post_classname":"","footnotes":""},"categories":[1,3],"tags":[38],"years":[54],"class_list":["post-1733","post","type-post","status-publish","format-standard","hentry","category-upsc","category-prelims","tag-indian-economy","years-54"],"acf":[],"taxonomy_info":{"category":[{"value":1,"label":"UPSC"},{"value":3,"label":"Prelims"}],"post_tag":[{"value":38,"label":"Indian Economy"}],"years":[{"value":54,"label":"2019"}]},"featured_image_src_large":false,"author_info":{"display_name":"LotusArise","author_link":"https:\/\/lotusarise.com\/qna\/author\/team-lotusarise"},"comment_info":0,"category_info":[{"term_id":1,"name":"UPSC","slug":"upsc","term_group":0,"term_taxonomy_id":1,"taxonomy":"category","description":"","parent":0,"count":1269,"filter":"raw","cat_ID":1,"category_count":1269,"category_description":"","cat_name":"UPSC","category_nicename":"upsc","category_parent":0},{"term_id":3,"name":"Prelims","slug":"prelims","term_group":0,"term_taxonomy_id":3,"taxonomy":"category","description":"","parent":1,"count":1251,"filter":"raw","cat_ID":3,"category_count":1251,"category_description":"","cat_name":"Prelims","category_nicename":"prelims","category_parent":1}],"tag_info":[{"term_id":38,"name":"Indian Economy","slug":"indian-economy","term_group":0,"term_taxonomy_id":38,"taxonomy":"post_tag","description":"","parent":0,"count":225,"filter":"raw"}],"_links":{"self":[{"href":"https:\/\/lotusarise.com\/qna\/wp-json\/wp\/v2\/posts\/1733","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/lotusarise.com\/qna\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/lotusarise.com\/qna\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/lotusarise.com\/qna\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/lotusarise.com\/qna\/wp-json\/wp\/v2\/comments?post=1733"}],"version-history":[{"count":0,"href":"https:\/\/lotusarise.com\/qna\/wp-json\/wp\/v2\/posts\/1733\/revisions"}],"wp:attachment":[{"href":"https:\/\/lotusarise.com\/qna\/wp-json\/wp\/v2\/media?parent=1733"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/lotusarise.com\/qna\/wp-json\/wp\/v2\/categories?post=1733"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/lotusarise.com\/qna\/wp-json\/wp\/v2\/tags?post=1733"},{"taxonomy":"years","embeddable":true,"href":"https:\/\/lotusarise.com\/qna\/wp-json\/wp\/v2\/years?post=1733"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}