A. Being the best at something does not mean that doing that thing is the best way to use your scarce economic resources.B. In 2000 , the EU controversially blocked a merger between two American firms, GE and Honeywell; the deal had already been approved by America's antitrust regulators.C. Some kinds of arbitrage are completely risk free this is pure arbitrage. For instance, if EUROS are available more cheaply in dollars in London than in New York, arbitrageurs also known as arbs can make a risk free PROFIT by buying euros in London and selling an identical amount of them in New York.D. But beggars cannot be choosers and newspaper managers have generally preferred to suffer the whims of deep pocketed proprietors than go out of business.

Q. Choose the option that best fills in the blank:

She prefers living in cities such _____ New York or London.

Q. Which set of keywords given below most closely captures the arguments of the passage?

The Indian financial sector has undergone tremendous changes in the last two decades. A lot of reforms have been undertaken in the sector that have led to proliferation of financial products, activities and organizational forms that have improved and increased the efficiency of the financial system. Mutual fund is a mechanism for pooling the resources by issuing units to the investors and investing funds in securities in accordance with objectives as disclosed in the offer document. Investments in securities are spread across a wide cross-section of industries and sectors and thus the risk is reduced. Diversification reduces the risk because not all stocks may move in the same direction in the same proportion at the same time. Mutual fund issues units to the investors in accordance with quantum of money invested by them. Investors of mutual funds are known as unit holders. The profits or losses are shared by the investors in proportion to their investments. The mutual funds normally come out with a number of schemes with different investment objectives, which are launched from time to time.

India as an emerging nation is seeing a spate of innovations in the area of financial engineering. These financial innovations are a result of a number of Government regulations, tax policies, globalization, liberalization, privatization, integration with the international financial market and increasing risk in the domestic financial market. Alternative financial institutions including nationalized banks, commercial paper houses, insurance companies and investment banks play a significant role in creation, development and dissemination of new financially engineered products in the society. The following section discusses the recent innovations made on mutual funds.

Even with crashing equity markets, Arbitrage Funds have been able to generate positive returns. They are equity and derivative funds providing an ideal way of realizing reasonable returns from equities with risk hedged by derivatives. The Arbitrage Fund tries to capitalize on the stock price differences between the spot market (cash segment) and the derivative market (F & O segment). The fund tries to generate returns by availing the arbitrage opportunities that arise in case there is mispricing between the spot and derivative market. The returns can be generated irrespective of the overall market movement. The stock prices in the spot and the derivative market tend to coincide on the settlement day of the derivative segment. Hence, the fund manager can reverse his position by buying a contract in the future market and selling off his equity holding in the spot market. The main concern is how efficiently the assets are balanced between the spot and the derivative market. Empirically they have shown better results than debt or income funds. They provide good returns during volatile periods.

Various art funds can now be floated in the market after obtaining approval from SEBI. In this people can pool-in funds to fund the purchase of the art and sell it later at a premium. The return would then be divided amongst the investors. This product may be suitable for High Net worth Individuals (HNIs) and institutional investors but not for the retail investors. This product raises art as a credible asset class. Art has a very low correlation with equity markets making it ideal for a large portfolio.

Q. Ali lives in New York and is trying to talk to his mother, who lives in London. Since both are in different parts of the world, London's time zone is 5 hours ahead of New York's.
If he wants to schedule a call at 6 p.m. in London, what time would it be in New York?

Q.

A. This does not mean that America should become more isolationist.

B. No one seriously imagines that peace can come to the Middle East without America.

C. Yet a president who understands, as Mr. Bush did not, that America is not the uncontested hyper power of the 1990s-one who values “soft power” more than the hard version-will be a change for the better.

D. An America led by such a man will listen more carefully to and work more closely with allies and rivals, will strive harder to respect the laws it has signed up to and might enter into new commitments, for instance to tackle climate change.

Q.

Read the passage to answer the question:
Most economists in the United States seem captivated by the spell of the free market. Consequently, nothing seems good or normal that does not accord with the requirements of the free market. A price that is determined by the seller or, for that matter, established by anyone other than the aggregate of consumers seems pernicious. Accordingly, it requires a major act of will to think of price-fixing (the determination of prices by the seller) as both “normal” and having a valuable economic function. In fact, price-fixing is normal in all industrialized societies because the industrial system itself provides, as an effortless consequence of its own development, the price-fixing that it requires. Modern industrial planning requires and rewards great size. Hence, a comparatively small number of large firms will be competing for the same group of consumers. That each large firm will act with consideration of its own needs and thus avoid selling its products for more than its competitors charge is commonly recognized by advocates of free-market economic theories. But each large firm will also act with full consideration of the needs that it has in common with the other large firms competing for the same customers. Each large firm will thus avoid significant price-cutting, because price-cutting would be prejudicial to the common interest in a stable demand for products. Most economists do not see price-fixing when it occurs because they expect it to be brought about by a number of explicit agreements among large firms; it is not.

Moreover, those economists who argue that allowing the free market to operate without interference is the most efficient method of establishing prices have not considered the economies of non-socialist countries other than the United states. These economies employ intentional price-fixing, usually in an overt fashion. Formal price-fixing by cartel and informal price-fixing by agreements covering the members of an industry are commonplace. Were there something peculiarly efficient about the free market and inefficient about price-fixing, the countries that have avoided the first and used the second would have suffered drastically in their economic development. There is no indication that they have.

Socialist industry also works within a framework of controlled prices. In the early 1970’s, the Soviet Union began to give firms and industries some of the flexibility in adjusting prices that a more informal evolution has accorded the capitalist system. Economists in the United States have hailed the change as a return to the free market. But Soviet firms are no more subject to prices established by a free market over which they exercise little influence than are capitalist firms; rather, Soviet firms have been given the power to fix prices.

The author’s attitude toward “Most economists in the United States” (first line) can best be described as: