What is a Foreign Institutional Investor (FII)?

"An individual or entity investing in their own country's financial markets" "An individual or entity investing in another country's financial markets and securities" "A government agency regulating international investments" "A type of investment fund exclusive to emerging markets"

Which of the following is NOT a type of FII operating in India?

"Hedge funds" "Sovereign wealth funds" "Local retail investors" "Pension funds"

What is a significant factor that can lead to FIIs withdrawing funds from emerging markets?

"Decreasing interest rates in developed economies" "Weakening of the U.S. dollar" "Strengthening of the U.S. dollar" "Low inflation in emerging markets"

How do FIIs generally react to rising inflation in emerging markets?

"They increase their investments due to potential higher returns" "They remain indifferent as inflation doesn't impact their decisions" "They pull out money as rising interest rates can shrink company profits" "They invest more in fixed-income securities to hedge against inflation"

What is a key driver for FIIs to invest in emerging markets?

"Political instability in developed countries" "High interest rates in emerging markets" "Global liquidity and a strong macro environment" "Strict regulations on foreign investments"

How do FIIs impact the Indian stock markets?

"They stabilize the market by preventing any price fluctuations" "They have a negligible impact as their investment volume is small" "They are a primary cause of stock market volatility" "They primarily invest in fixed-income securities, thus having minimal impact on the stock market"

What is a positive contribution of FIIs to developing economies?

"They increase reliance on domestic investors" "They hinder financial innovation due to regulatory constraints" "They improve capital structures and bridge investment gaps" "They decrease competition in financial markets"