Multiple choice

Many times we read a term "Hot Money" in newspapers. What is/are the characteristics of Hot Money? (1) The term is used for fresh currency notes issued by the RBI. (2) It is the fund which flows in the market to take advantage of high interest rates. (3) It is the Fund which is thrown in the market to create imbalance in the stock markets.

  1. Only 1

  2. Only 2

  3. Only 3

  4. All 1,2 & 3

  5. None of these
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Hot money refers to capital that flows rapidly between financial markets to take advantage of short-term interest rate differentials or currency fluctuations, rather than for long-term investment.

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