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    Question

    With reference to the sovereign green bonds’

    framework, consider the following statements:           I.             Green bonds are financial instruments that generate funds for investment in environmentally sustainable and climate-suitable projects.         II.             The proceeds will be deposited to the Public Accounts of India in line with the regular treasury policy.       III.             Green bonds command a relatively lower cost of capital compared to regular bonds. Which of the above statement is/are not correct?
    A Only I Correct Answer Incorrect Answer
    B Only II Correct Answer Incorrect Answer
    C Only I and II Correct Answer Incorrect Answer
    D Only II and III Correct Answer Incorrect Answer
    E I, II and III Correct Answer Incorrect Answer

    Solution

    Green bonds are financial instruments that generate funds for investment in environmentally sustainable and climate-suitable projects.

    The proceeds generated from the issuance of such bonds will be deployed in Public Sector projects which help in reducing carbon intensity of the economy.

    The proceeds generated from the issuance of such bonds will be deployed in Public Sector projects which help in reducing carbon intensity of the economy. Also, green bonds command a relatively lower cost of capital compared to regular bonds.

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