December 07 2023 Prelims Practice Questions (PPQs)

Questions

• The questions below are based on PMF IAS Daily Current Affairs – December 2023.

Q1. {IE – Banking} Consider the following statements about Alternative Investment Funds:

1. AIF is any fund established in India which is a privately pooled investment vehicle that collects funds from sophisticated Indian investors for investing.
2. AIFs are only allowed to be formed as a Trust or a Mutual Funds House.
3. Category I and II AIFs are required to be open ended and have a minimum tenure of five years for Maturity. Category III AIFs may be open ended or close ended.
4. A Retail Investor Can’t invest in an AIF.

Which of the above statement(s) is/are correct?

1. Only one
2. Only two
3. Only three
4. All

Q2. {S&T – AI} Gemini’ which was recently in news is related to,

1. Generative AI Technology
2. Artificial Intelligence technology
3. Virtual reality technology
4. Augmented reality technology

Q3. {MoC – Initiative} Consider the following statements about Miyanwaki Method:

1. It is a Japanese method of creating dense urban forests in a small area.
2. They are self-sustaining but slow growing forests.
3. The plants used in the Miyawaki method don’t require regular maintenance like manuring and watering.
4. These forests have the ability to replace Natural Forests in Future.

How many of the above statement(s) is/are correct?

1. Only one
2. Only two
3. Only three
4. All

Q4. {Envi – Conservation} Consider the following statements:

1. Surface Coastal regions periodically experience upwelling events where deeper ocean water circulates onto continental shelves and near-shore areas.
2. The hot water of ocean circulation contains more nutrients & more CO2.
3. Large Population of Marine Mammals, sea birds and abundant of fisheries live in the warm water region.

How many of the above statement(s) is/are correct?

1. Only one
2. Only two
3. All
4. None

Q5. {S&T – Tech} Consider the following statements regarding Nuclear Fusion:

1. In Nuclear Fusion, atoms are split apart into lighter elements releasing energy.
2. Sun and Stars produce power with the help of Nuclear Dusion.

Which of the above statement(s) is/are correct ?

1. 1 Only
2. 2 Only
3. Both 1 and 2
4. Neither 1 nor 2

Questions with their Answers and Explanation.

Q1. {IE – Banking} Consider the following statements about Alternative Investment Funds:

1. AIF is any fund established in India which is a privately pooled investment vehicle that collects funds from sophisticated Indian investors for investing.
2. AIFs are only allowed to be formed as a Trust or a Mutual Funds House.
3. Category I and II AIFs are required to be open ended and have a minimum tenure of five years for Maturity. Category III AIFs may be open ended or close ended.
4. A Retail Investor Can’t invest in an AIF.

Which of the above statement(s) is/are correct?

1. Only one
2. Only two
3. Only three
4. All

Explanation

Statement 1 is incorrect

• The Alternative Investment Funds is a special investment category that differs from conventional investment instruments.
• AIF is any fund established in India which is a privately pooled investment vehicle that collects funds from sophisticated investors, both Indian or foreign, for investing.

  

Statement 2 is incorrect

• These investment vehicles adhere to the SEBI (Alternative Investment Funds) Regulations, 2012. AIFs can be formed as a company, Limited Liability Partnership (LLP), trust, etc.

Statement 3 is incorrect

• Category I and II AIFs are required to be close ended and have a minimum tenure of three years. Category III AIFs may be open ended or close ended.
• Category I AIFs:
  • They can invest in start-ups, early stage ventures, social ventures, SMEs and sectors which the government or regulators consider as socially or economically desirable.
  • They include venture capital funds like angel funds, SME Funds, social venture funds, infrastructure funds and such other AIFs as may be specified.
• Category II AIFs:
  • They are those which are not classified under Category I or Category III.
  • They do not undertake leverage or borrowing other than to meet day-to-day operational requirements and as permitted in the regulations.
  • Various types of funds such as real estate funds, debt funds, private equity funds, funds for distressed assets, etc. are registered as Category II AIFs.
• Category III AIFs:
  • ​​​​​​​They are funds which employ complex or diverse trading strategies and may employ leverage including through investment in listed or unlisted derivatives hedge funds, PIPE Funds, etc. are registered as Category III AIFs.

Statement 4 is correct

• Individuals investing up to Rs. 2 lakhs in an IPO are categorized by the SEBI as retail investors. Such investors are usually small-time individuals with low net worth and without the backing of large corporations.
• According to SEBI, an individual investor needs to have a minimum investment corpus of INR 1 Cr to start investing in AIFs.
• According to SEBI, every AIF scheme should have a corpus of at least INR 20 Cr. However for angel funds, the corpus should be at least INR 10 Cr.
• Except angel funds, no AIF shall accept an investment of value less than INR 10 Cr. However, for the employees or directors of an AIF or employees or directors of the fund manager, the minimum value of investment stands at INR 25 Lakh.

Answer: (a) Only One | Difficulty Level: Tough

Q2. {S&T – AI} Gemini’ which was recently in news is related to,

1. Generative AI Technology
2. Artificial Intelligence technology
3. Virtual reality technology
4. Augmented reality technology

Explanation

• Gemini is a large language model (LLM) developed by Google’s DeepMind division. It’s designed to compete with other AI systems like OpenAI’s ChatGPT and possibly outperform them.
• Gemini is an AI model trained to behave in human-like ways that might intensify the debate about the technology’s potential promise and perils.
• Gemini is designed from the ground up to be multimodal, integrating text, images, and other data types. This could allow for more natural conversational abilities.

Answer: (b) Artificial Intelligence Technology | Difficulty Level: Easy

Q3. {MoC – Initiative} Consider the following statements about Miyanwaki Method:

1. It is a Japanese method of creating dense urban forests in a small area.
2. They are self-sustaining but slow growing forests.
3. The plants used in the Miyawaki method don’t require regular maintenance like manuring and watering.
4. These forests have the ability to replace Natural Forests in Future.

How many of the above statement(s) is/are correct?

1. Only one
2. Only two
3. Only three
4. All

Explanation

Statement 1 is correct

• The Miyawaki Plantation Method was developed in the 1970s by the Japanese botanist Akira Miyawaki with the basic objective to densify green cover within a small parcel of land.
• It is a Japanese method of creating dense urban forests in a small area that involves planting two to four different types of indigenous trees within every square metre.

  

Statement 2 is incorrect

• In this method, the trees become self-sustaining and they grow to their full length within three years.
• The approach is supposed to ensure that plant growth is 10 times faster and the resulting plantation is 30 times denser than usual. It involves planting dozens of native species in the same area, and becomes maintenance-free after the first three years.

Statement 3 is correct

• One of the advantages of Miyanwaki Method is that the plants used in the Miyawaki method are mostly self-sustaining and don’t require regular maintenance like manuring and watering.

Statement 4 is incorrect

• Planting trees according to Miyanwaki Method is not an “One Size Fits All” approach. Planting Saplings without conducting a proper research of that area’s geographical Conditions violates Fundamental Laws of Ecology.
• For ex, Planting Miyawaki saplings in bone-dry landscapes by pumping the soil with water and nutrients might produce a patch of trees, but destroy native ecosystems, pushing plants and animals that depend on them to the brink. The new trees could impact the region’s hydrology that native shrubs and grasses have adapted to, sucking up already scarce resources, exhausting the water table.
• Miyawaki forests are not intended to, and will never replicate natural forests because they are a very artificial forest.

Answer: (b) Only two | Difficulty Level: Medium

Q4. {Envi – Conservation} Consider the following statements:

1. Surface Coastal regions periodically experience upwelling events where deeper ocean water circulates onto continental shelves and near-shore areas.
2. The hot water of ocean circulation contains more nutrients & more CO2.
3. Large Population of Marine Mammals, sea birds and abundant of fisheries live in the warm water region.

How many of the above statement(s) is/are correct?

1. Only one
2. Only two
3. All
4. None

Explanation

Statement 1 is correct

• Surface Coastal regions periodically experience upwelling events where deeper ocean water circulates onto continental shelves and near-shore areas.
• Coastal upwelling is the process by which strong winds blow down the coasts of continents and, in conjunction with the earth’s rotation, cause the surface waters to be pushed offshore. Water from the ocean depths is then pulled up – or upwelled – to the surface to take its place.

  

Statement 2 is incorrect

• Water from the depths is actually much different in temperature, nutrient content, and chemical composition than that of surface water.
• Bottom water tends to be colder due to a lack of sunlight, more nutrient-rich due to the decomposition of settling organic matter, and more acidic and less oxygenated. When this water gets pulled up to the surface and exposed to sunlight, the nutrients within it help fuel an ecosystem driven by high primary production.

Statement 3 is incorrect

• As the bottom water which tends to be colder and more nutrient rich due to decomposition of settling decomposition matter, there is an increase in abundance of organisms over there.
• This increase in abundance of organisms at the lowest level of the marine food web allows for the consumers higher up in the food web to obtain the food and energy that they need to thrive. This is the reason for large populations of marine mammals and sea birds, as well as the abundant fisheries in this region.

Answer: (b) Only one | Difficulty Level: Easy

Q5. {S&T – Tech} Consider the following statements regarding Nuclear Fusion:

1. In Nuclear Fusion, atoms are split apart into lighter elements releasing energy.
2. Sun and Stars produce power with the help of Nuclear Dusion.

Which of the above statement(s) is/are correct ?

1. 1 Only
2. 2 Only
3. Both 1 and 2
4. Neither 1 nor 2

Explanation

Statement 1 is incorrect

• Nuclear fusion process that produces atomic nuclei lighter than iron-56 or nickel-62 will generally release energy. These elements have a relatively small mass and a relatively large binding energy per nucleon. Fusion of nuclei lighter than these releases energy (an exothermic process), while the fusion of heavier nuclei results in energy retained by the product nucleons, and the resulting reaction is endothermic.
  

  Nuclear Fusion	Nuclear Fission
  Nuclear fusion is a nuclear reaction that combines two or more small atoms to form a large atom	Nuclear fission is a nuclear reaction that splits a heavy atom into multiple smaller ones.
  The universe is full of instances of nuclear fusion reactions. Every star uses it to produce energy.	It does not Occur Naturally.
  It produces greater energy than the fission reaction.	It produces a large quantity of Energy.
  It requires a lot of heat and pressure for the process to happen.	It does not require a lot of energy to split an atom into two.

Statement 2 is correct

• Fusion powers stars and produces virtually all elements in a process called nucleosynthesis. The Sun is a main-sequence star, and, as such, generates its energy by nuclear fusion of hydrogen nuclei into helium.
• In its core, the Sun fuses 620 million metric tons of hydrogen and makes 616 million metric tons of helium each second. The fusion of lighter elements in stars releases energy and the mass that always accompanies it. For example, in the fusion of two hydrogen nuclei to form helium, 0.645% of the mass is carried away in the form of kinetic energy of an alpha particle or other forms of energy, such as electromagnetic radiation.

Answer: (b) 2 Only | Difficulty Level: Easy