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 are created by banks to provide a buffer against the volatility in the market value of their investment portfolios, specifically to manage Interest Rate Risk.

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