Which of the following statements is/are correct? 1. Most of India's reserves is held in the form of foreign currency. 2. There is no cost of holding foreign currency as reserves by a nation. Select the correct answer using the code given below.

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Submitted by examrobotsa on

Q: 62 (CDS-I/2024)
Which of the following statements is/are correct?
1. Most of India's reserves is held in the form of foreign currency.
2. There is no cost of holding foreign currency as reserves by a nation.
Select the correct answer using the code given below.

question_subject: 

Economics

question_exam: 

CDS-I

The first statement is correct because a significant portion of India's reserves is held in the form of foreign currency assets. The second statement is incorrect because there are costs associated with holding foreign currency reserves, such as opportunity costs and sterilization costs.