Multiple choice

Which of the following is the purpose owing to which banks have created Investment Fluctuation Reserves (IFR)? This will help them in managing:

  1. Interest rate risk

  2. CRR

  3. SLR

  4. Foreign Currency Accounts

  5. None of these
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A Correct answer
Explanation

Investment Fluctuation Reserves (IFR) are created by banks to cushion against potential losses in their investment portfolios. These losses typically occur due to fluctuations in market interest rates, which affect the valuation of fixed-income securities.

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