IBPS Reading Comprehension 5

Question 1

Passage: 'Green bonds are debt instruments issued to raise capital specifically for environmentally beneficial projects such as renewable energy and sustainable infrastructure. Their growing popularity reflects increasing investor demand for socially responsible investment options.' What distinguishes green bonds from conventional bonds?

Accepted Answer

Proceeds are earmarked for environmentally beneficial projects

Answer

The passage specifies that green bonds raise capital 'specifically for environmentally beneficial projects,' distinguishing them from conventional bonds.

Question 2

Read: 'The IBPS PO examination tests candidates on their ability to comprehend dense financial texts, identify central themes, and draw logical inferences. Success depends not merely on vocabulary but on the capacity to reason analytically under time pressure.' According to the passage, what is essential for success in the reading comprehension section?

Accepted Answer

Analytical reasoning and comprehension under time pressure

Answer

The passage emphasizes analytical reasoning and comprehension under time pressure as key success factors, beyond mere vocabulary.

Question 3

Passage: 'Inflation erodes the purchasing power of money, meaning that a fixed sum of money buys fewer goods and services over time. Central banks combat inflation by raising interest rates, which discourages borrowing and cools consumer spending.' How do higher interest rates reduce inflation according to the passage?

Accepted Answer

By discouraging borrowing and cooling consumer spending

Answer

The passage states higher interest rates discourage borrowing and cool consumer spending, thereby combating inflation.

Question 4

A passage reads: 'Deposit insurance schemes protect small depositors by guaranteeing repayment of deposits up to a specified limit in the event of bank failure. In India, the Deposit Insurance and Credit Guarantee Corporation insures deposits up to ₹5 lakh per depositor per bank.' Who primarily benefits from deposit insurance according to the passage?

Accepted Answer

Small depositors

Answer

The passage explicitly states that deposit insurance schemes protect 'small depositors' by guaranteeing repayment.

Question 5

Passage: 'Venture capital fuels innovation by providing equity financing to early-stage companies with high growth potential but limited access to traditional bank credit. Unlike debt financing, venture capital does not require repayment but dilutes the founders' ownership stake.' What is a key difference between venture capital and debt financing?

Accepted Answer

Venture capital dilutes ownership rather than requiring repayment

Answer

The passage contrasts venture capital (dilutes ownership, no repayment) with debt financing (requires repayment).

IBPS - Institute of Banking Personnel Selection Practice Test

IBPS - Institute of Banking Personnel Selection Practice Test

IBPS Reading Comprehension 5