Indian Government Bond Yields are influenced by which of the following? 1. Actions of the United States Federal Reserve 2. Actions of the Reserve bank of India 3. Inflation and short-term interest rates Select the correct answer using the code given below.

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Correct answer: 1, 2 and 3. Bond yield is the return an investor gets on that bond or on a particular government security. It depends on the price of the bond which is impacted by its demand. Statement 1, 2 and 3 are correct : Factor Scenario Impact Effect on Bond Yields 1. US Federal Reserve Actions Raises Inter- est Rates Capital outflows from In- dia as US bonds become more attractive. Yields rise due to lower demand for Indian bonds. Lowers Interest Rates Capital inflows to India as Indian bonds offer better returns. Yields fall due to higher demand for Indian bonds. 2. RBI Actions Increases Repo Rates (Tightening Policy) Higher borrowing costs slow down credit growth and economic activity. Yields rise as new bonds offer higher interest. Cuts Repo Rates (Eas- ing Policy) Cheaper borrowing encourages economic activity and credit flow. Yields fall as new bonds are issued at lower rates. 3. Inflation and Short- Term Interest Rates Rising Inflation Reduces the real value of bond interest payments. Yields rise to com- pensate for inflation. Falling Inflation Improves real returns on b

Indian Government Bond Yields are influenced by which of the following?1. Actions of the United States Federal Reserve2. Actions of the Reserve bank of India3. Inflation and short-term interest ratesSelect the correct answer using the code given below.

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Indian Government Bond Yields are influenced by which of the following?1. Actions of the United States Federal Reserve2. Actions of the Reserve bank of India3. Inflation and short-term interest ratesSelect the correct answer using the code given below.

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