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      Question

      What is the primary purpose of the Investment

      Fluctuation Reserve (IFR) maintained by banks?ย 
      A To finance rural development projects Correct Answer Incorrect Answer
      B To absorb losses arising from mark-to-market valuation changes in investments Correct Answer Incorrect Answer
      C To provide insurance against cyber frauds Correct Answer Incorrect Answer
      D To support agricultural credit expansion Correct Answer Incorrect Answer
      E To manage foreign exchange reserves Correct Answer Incorrect Answer

      Solution

      The Investment Fluctuation Reserve (IFR) is a reserve created by banks from profits to absorb losses arising from mark-to-market valuation changes in investment portfolios, especially government securities.ย 

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