December 13 2023 Prelims Practice Questions (PPQs)

Questions

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

Q1. {IE – Securities} Consider the following statements with regards to ETFs:

1. ETFs are a Pooled Investment Vehicle that offers diverse investment opportunities in stocks, bonds, commodities, Gold, Silver, Options or a blend of these.
2. ETFs can be individually bought and sold on the NSE and BSE.
3. They have Low Liquidity as compared to Mutual Funds and their expense ratio is on the higher side.
4. ETFs allow shareholders own a part of the fund’s assets.

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

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

Q2. {Envi – UNFCCC} Consider the following statements with regards to Global River Cities Alliance:

1. It is a 9-nation alliance led by India which was launched at the United Nations Climate Change Conference COP28 in Dubai.
2. It is Inspired by India’s River City Alliance.
3. UNEP and International River Network will take on the role of the Secretariat of GRCA.

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

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

Q3. {Envi – Climate Change} The Global Expert Review on Debt, Nature and Climate, often seen in the news recently, is an initiative by which of the following countries?

1. Kenya
2. Colombia
3. France
4. India
5. Brazil

Choose the Correct Codes:

1. 1, 2 and 3
2. 1, 3 and 4
3. 2, 3 and 5
4. 1, 3 and 5

Q4. {Envi – UNFCCC} Consider the following statements regarding Carbon neutrality:

1. Carbon neutrality refers to achieving net zero carbon dioxide emissions.
2. It can be achieved through carbon offsetting or eliminating carbon dioxide emissions altogether.
3. Artificial Carbon Sinks have clocked in a huge success to remove carbon from the atmosphere to fight global warming.
4. Renewable energy always produces zero carbon emissions.

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

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

Q5. {Envi – UNFCCC} Global Cooling Watch Report is published by,

1. International Union for Conservation of Nature (IUCN)
2. World Wildlife Fund (WWF)
3. United Nations Environment Programme (UNEP)
4. International Energy Agency (IEA)

Q6. {MoPNG – Initiatives} Consider the following statements regarding Ethanol Blending:

1. Ethanol Blending is aimed at reducing the country’s dependence on crude oil imports, cutting carbon emissions, and boosting farmers’ incomes.
2. The Government of India has advanced the target for 20% ethanol blending in petrol (also called E20) to 2025 from 2030.
3. Majority of the country’s ethanol is made from cane juice.
4. Biofuels produces more energy than Fossil Fuels. For ex, 1 gallon of ethanol produces more energy as compared to 1 gallon of gasoline (a fossil fuel).

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

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

Questions with their Answers and Explanation.

Q1. {IE – Securities} Consider the following statements with regards to ETFs:

1. ETFs are a Pooled Investment Vehicle that offers diverse investment opportunities in stocks, bonds, commodities, Gold, Silver, Options or a blend of these.
2. ETFs can be individually bought and sold on the NSE and BSE.
3. They have Low Liquidity as compared to Mutual Funds and their expense ratio is on the higher side.
4. ETFs allow shareholders own a part of the fund’s assets.

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

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

Explanations

Statement 1 is correct

• An Exchange Traded Fund (ETF) is similar to a mutual fund scheme that is created to track and mirror the performance of stock market indices such as Sensex, NIFTY 50, NIFTY Bank, NIFTY Next 50, Gold, Silver, Options, etc.
• Exchange-Traded Funds (ETFs) are considered passively managed funds as the portfolio managers do not try to outperform but mirror the performance of the underlying stock market index.

Statement 2 is correct

• A Retail Investor can easily buy or sell an ETFs on his/her own. For that, he/she doesn’t need a Big Fund Manager.
• A Retail Investor, just needs to have a brokerage account registered with CDSL/NSDL.
• Then he/she needs to browse and choose the ETF(s) he/she wishes to invest in, considering one’s investment goals and risk tolerance.
• After selecting the desired ETF, Investor needs to use the Brokerage App to transfer funds into trading account, providing the necessary capital to purchase ETF shares.

Statement 3 is incorrect

• ETFs have a Higher Liquidity as compared to Mutual Funds. Their Volumes on Exchanges are on a higher side compared to a Mutual Fund, indicating that there are a lot of buyers to buy the ETFs when an Investor wants to Sell them.
• Also, they don’t require a Lock-In Period, that makes them lucrative buy for investors, as they can use the funds in time of an Emergency.

Statement 4 is incorrect

• The assets that are underlying are owned by the fund provider, who then forms a fund to track the performance and offers shares in that fund to investors. Shareholders own a part of an ETF but not the fund’s assets.

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

Q2. {Envi – UNFCCC} Consider the following statements with regards to Global River Cities Alliance:

1. It is a 9-nation alliance led by India which was launched at the United Nations Climate Change Conference COP28 in Dubai.
2. It is Inspired by India’s River City Alliance.
3. UNEP and International River Network will take on the role of the Secretariat of GRCA.

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

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

Explanation

Statement 1 is correct

• Global River Cities Alliance (GRCA) is a nine-nation alliance led by India which was launched at the United Nations Climate Change Conference COP28 in Dubai.
• The 9 nations include India, Denmark, Cambodia, Japan, Bhutan, Australia, Netherlands, Egypt and Ghana.
• The alliance calls for new river planning, that emphasize the need to mainstream rivers in urban planning without a regulatory mind-set.

Statement 2 is correct

• The GRCA is inspired by India’s River Cities Alliance (RCA).
• River Cities Alliance is an initiative of Namami Gange programme.

Statement 3 is incorrect

• The National Mission for Clean Ganga and Urban Affairs ministry’s National Institute for Urban Affairs (NIUA) will take on the role of the Secretariat of the GRCA.

Answer: (a) Only one ; Difficulty Level: Medium

Q3. {Envi – Climate Change} The Global Expert Review on Debt, Nature and Climate, often seen in the news recently, is an initiative by which of the following countries?

1. Kenya
2. Colombia
3. France
4. India
5. Brazil

Choose the Correct Codes:

1. 1, 2 and 3
2. 1, 3 and 4
3. 2, 3 and 5
4. 1, 3 and 5

Explanation

• The Global Expert Review on Debt, Nature and Climate is an initiative of Kenya, Colombia and France to tackle debt & climate change.
• It is an expert group established at the 2023 United Nations Climate Change Conference (COP28).
• The aim of the effort is to make structural economic transformation for low carbon economic growth.
• It aids to comprehensively assess how sovereign debt impacts the ability of low– and middle-income countries to address climate change, conserve nature and decarbonize their economies.
• The review will assess how sovereign debt affects the ability of developing countries to:
  • Conserve nature
  • Adapt to climate change
  • Decarbonize their economies
  • Become more sustainable

Answer: (a) 1,2 and 3 ; Difficulty level: Easy(Factual)

Q4. {Envi – UNFCCC} Consider the following statements regarding Carbon neutrality:

1. Carbon neutrality refers to achieving net zero carbon dioxide emissions.
2. It can be achieved through carbon offsetting or eliminating carbon dioxide emissions altogether.
3. Artificial Carbon Sinks have clocked in a huge success to remove carbon from the atmosphere to fight global warming.
4. Renewable energy always produces zero carbon emissions.

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

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

Explanation

Statement 1 is correct

• Carbon neutrality means every ton of anthropogenic CO2 emitted is compensated with an equivalent amount of CO2 removed, according to World Resources Institute.
• In order to limit global warming to 1.5 degrees Celsius, carbon neutrality by mid-21st century is essential. This target is also laid down in the Paris agreement signed by 195 countries, including the EU.

Statement 2 is correct

• Another way to reduce emissions and to pursue carbon neutrality is to offset emissions made in one sector by reducing them somewhere else. This can be done through investment in renewable energy, energy efficiency or other clean, low-carbon technologies.

Statement 3 is incorrect

• To date, no artificial carbon sinks are able to remove carbon from the atmosphere on the necessary scale to fight global warming.

Statement 4 is incorrect

• Although both renewable and non-renewable energy both produce carbon emissions in some form, renewable energy has a lesser to almost zero carbon emissions.

Answer: (b) Only two ; Difficulty Level: Easy (Conceptual)

Q5. {Envi – UNFCCC} Global Cooling Watch Report is published by,

1. International Union for Conservation of Nature (IUCN)
2. World Wildlife Fund (WWF)
3. United Nations Environment Programme (UNEP)
4. International Energy Agency (IEA)

Explanation

• The Global Cooling Watch Report is a product of UNEP‘s Cool Coalition, which is a global network of organizations and individuals working to advance the transition to efficient, climate-friendly cooling. The report assesses the current state of the cooling sector and identifies the policies and investments needed to shift to efficient and sustainable cooling solutions.
• Recently, the Global Cooling Watch 2023 Report titled “Keeping it Chill: How to meet cooling demands while cutting emissions” was released.
• Increasing energy efficiency, protecting natural carbon sinks, and Developing carbon capture and storage technologies, are part of the key strategy outlined in the Global Cooling Pledge.

Answer: (c) United Nations Environment Programme (UNEP); Difficulty Level: Easy (Factual)

Q6. {MoPNG – Initiatives} Consider the following statements regarding Ethanol Blending:

1. Ethanol Blending is aimed at reducing the country’s dependence on crude oil imports, cutting carbon emissions, and boosting farmers’ incomes.
2. The Government of India has advanced the target for 20% ethanol blending in petrol (also called E20) to 2025 from 2030.
3. Majority of the country’s ethanol is made from cane juice.
4. Biofuels produces more energy than Fossil Fuels. For ex, 1 gallon of ethanol produces more energy as compared to 1 gallon of gasoline (a fossil fuel).

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

• Ethanol Blending Programme (EBP): It is aimed at reducing the country’s dependence on crude oil imports, cutting carbon emissions and boosting farmers’ incomes.
• It is one of the principal biofuels, which is naturally produced by the fermentation of sugars by yeasts or via petrochemical processes such as ethylene hydration.
• Availability of large arable land, rising production of foodgrains and sugarcane leading to surpluses, availability of technology to produce ethanol from plant-based sources, and the feasibility of making vehicles compliant to ethanol blended petrol (EBP) are some of the supporting arguments used in the roadmap for E20, which refers to the target as “not only a national imperative, but also an important strategic requirement.

Statement 2 is Correct

• The Government of India has advanced the target for 20% ethanol blending in petrol (also called E20) to 2025 from 2030.

Statement 3 is incorrect

• Nearly 25% of the country’s ethanol is made from cane juice, while another 50% comes from molasses, and the rest comes from grains, such as rice and maize.
  

  The Centre has signed off on a plan to procure maize, or corn, at minimum support prices (MSP) to incentivize more farmers to grow it enough to meet the country’s biofuel needs affordably. Maize has emerged as a key commercial crop in the country because of its use in making ethanol, which is blended with petrol. It is also a major poultry feed. Therefore, apart from being food and feed, its industrial use makes it a lucrative crop that can benefit farmers with a bigger market provided they get the right price. The government’s decision will help to reduce the dependence on sugar or staples, such as broken rice and full-grain rice, which are also primary sources for making ethanol.

Statement 4 is incorrect

• One of the significant issues related to Ethanol Blending is of its Efficiency. Fossil Fuels produce more energy than some of the biofuels. E.g. 1 gallon of ethanol produces less energy as compared to 1 gallon of gasoline (a fossil fuel).

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