Correct answer: (d) 1, 2 and 3
Explanation
- A
1 and 2 only
1 and 2 only. Inflation and short rates also move the G-sec curve.
- B
2 only
2 only. Fed action and inflation are in the same yield story.
- C
3 only
3 only. Under-counts policy rates at home and abroad.
- D
1, 2 and 3
All three. Fed, RBI, and inflation/short rates all price Indian government bonds.
Summary. Official key is (d) 1, 2 and 3. Indian G-sec yields move with RBI policy, with US Fed spillovers, and with inflation and short-term rates. None of the three is idle.
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