IBPS SO PRELIM 2017

Direction: Read the following passage carefully and answer the questions that follow. Certain words are printed in bold to help you locate them while answering some of these.An influential new recruit has joined the chorus of bitcoin skeptics. The chief investment officer of UBS Plc, the world’s biggest wealth manager, says it’s too risky to be added to the firm’s portfolios—and his assessment is relatively mild. Others have called it “the very definition of a bubble” and even “a fraud”. Those stronger terms are justified, especially after the latest spell of wild price volatility. But the idea underlying bitcoin—blockchain, or distributed-ledger technology—could be transformative. The problem with bitcoin and other so-called digital currencies is that they’re a misuse of this technology. As either a new form of money or an investment, bitcoin has fatal disadvantages. Tokens that are privately created—“mined,” if you insist—can succeed in a limited way as a means of exchange and be used to execute certain kinds of transactions. (Cigarettes in prison are a kind of currency.) But as a reliable store of value, bitcoin is much less useful, because its volatility is so extreme. The value of ordinary currencies is underwritten by governments and stabilized by central banks acting as trusted monopoly producers. Bitcoin and its rivals leave those vital roles vacant. Moreover, bitcoin has no fundamental value as an asset—no stream of future income, no ultimate assurance of liquidity or security, and (unlike gold, say) no alternative use. Its scarcity (hence some floor on its value) is purportedly guaranteed by the underlying technology, but most of its buyers simply take that on trust. Should they come to doubt that guarantee, its price will collapse. In the meantime, bitcoin’s utility as a means of exchange depends on official tolerance—a point rightly emphasized by UBS’s Mark Haefele. That tolerance cannot be taken for granted, especially as bitcoin’s appeal rests so much on the anonymity of its users. At the moment, its comparative advantage is its usefulness for illicit purposes. All this said, the blockchain technology that underlies bitcoin is potentially very powerful. By reducing the need for central intermediaries, it holds out the promise of processing transactions of various kinds more efficiently than today. Many banks and exchanges are exploring these applications. Blockchain technology might also be used one day to produce new kinds of central bank money. Central bank digital currency could start to replace the electronic payment systems that financial institutions use with each other. A more radical idea is to use digital currency, issued and supervised by the central bank, at the retail level to replace physical cash. All these ideas are worth study now. And they’ll still be worth pursuing after the bitcoin bubble bursts. Source: https://www.livemint.com/Opinion/rcSdqv5Gbmi3EW2HXKGziM/Bitcoin-may-be-a-bubble-but-blockchain-is-not.html
Why is blockchain technology perceived to have a promising future for financial transactions?

Direction: Read the following passage carefully and answer the questions that follow. Certain words are printed in bold to help you locate them while answering some of these.An influential new recruit has joined the chorus of bitcoin skeptics. The chief investment officer of UBS Plc, the world’s biggest wealth manager, says it’s too risky to be added to the firm’s portfolios—and his assessment is relatively mild. Others have called it “the very definition of a bubble” and even “a fraud”. Those stronger terms are justified, especially after the latest spell of wild price volatility. But the idea underlying bitcoin—blockchain, or distributed-ledger technology—could be transformative. The problem with bitcoin and other so-called digital currencies is that they’re a misuse of this technology. As either a new form of money or an investment, bitcoin has fatal disadvantages. Tokens that are privately created—“mined,” if you insist—can succeed in a limited way as a means of exchange and be used to execute certain kinds of transactions. (Cigarettes in prison are a kind of currency.) But as a reliable store of value, bitcoin is much less useful, because its volatility is so extreme. The value of ordinary currencies is underwritten by governments and stabilized by central banks acting as trusted monopoly producers. Bitcoin and its rivals leave those vital roles vacant. Moreover, bitcoin has no fundamental value as an asset—no stream of future income, no ultimate assurance of liquidity or security, and (unlike gold, say) no alternative use. Its scarcity (hence some floor on its value) is purportedly guaranteed by the underlying technology, but most of its buyers simply take that on trust. Should they come to doubt that guarantee, its price will collapse. In the meantime, bitcoin’s utility as a means of exchange depends on official tolerance—a point rightly emphasized by UBS’s Mark Haefele. That tolerance cannot be taken for granted, especially as bitcoin’s appeal rests so much on the anonymity of its users. At the moment, its comparative advantage is its usefulness for illicit purposes. All this said, the blockchain technology that underlies bitcoin is potentially very powerful. By reducing the need for central intermediaries, it holds out the promise of processing transactions of various kinds more efficiently than today. Many banks and exchanges are exploring these applications. Blockchain technology might also be used one day to produce new kinds of central bank money. Central bank digital currency could start to replace the electronic payment systems that financial institutions use with each other. A more radical idea is to use digital currency, issued and supervised by the central bank, at the retail level to replace physical cash. All these ideas are worth study now. And they’ll still be worth pursuing after the bitcoin bubble bursts. Source: https://www.livemint.com/Opinion/rcSdqv5Gbmi3EW2HXKGziM/Bitcoin-may-be-a-bubble-but-blockchain-is-not.html
How can financial institutions benefit from the blockchain technology? (i) It can be used as an alternative to digital transactions for inter-financial markets (ii) Digital transactions can become more efficient with the use of blockchain technology (iii) It can help banks in cost saving as it is a cheaper alternative to physical cash

Direction: Read the following passage carefully and answer the questions that follow. Certain words are printed in bold to help you locate them while answering some of these.An influential new recruit has joined the chorus of bitcoin skeptics. The chief investment officer of UBS Plc, the world’s biggest wealth manager, says it’s too risky to be added to the firm’s portfolios—and his assessment is relatively mild. Others have called it “the very definition of a bubble” and even “a fraud”. Those stronger terms are justified, especially after the latest spell of wild price volatility. But the idea underlying bitcoin—blockchain, or distributed-ledger technology—could be transformative. The problem with bitcoin and other so-called digital currencies is that they’re a misuse of this technology. As either a new form of money or an investment, bitcoin has fatal disadvantages. Tokens that are privately created—“mined,” if you insist—can succeed in a limited way as a means of exchange and be used to execute certain kinds of transactions. (Cigarettes in prison are a kind of currency.) But as a reliable store of value, bitcoin is much less useful, because its volatility is so extreme. The value of ordinary currencies is underwritten by governments and stabilized by central banks acting as trusted monopoly producers. Bitcoin and its rivals leave those vital roles vacant. Moreover, bitcoin has no fundamental value as an asset—no stream of future income, no ultimate assurance of liquidity or security, and (unlike gold, say) no alternative use. Its scarcity (hence some floor on its value) is purportedly guaranteed by the underlying technology, but most of its buyers simply take that on trust. Should they come to doubt that guarantee, its price will collapse. In the meantime, bitcoin’s utility as a means of exchange depends on official tolerance—a point rightly emphasized by UBS’s Mark Haefele. That tolerance cannot be taken for granted, especially as bitcoin’s appeal rests so much on the anonymity of its users. At the moment, its comparative advantage is its usefulness for illicit purposes. All this said, the blockchain technology that underlies bitcoin is potentially very powerful. By reducing the need for central intermediaries, it holds out the promise of processing transactions of various kinds more efficiently than today. Many banks and exchanges are exploring these applications. Blockchain technology might also be used one day to produce new kinds of central bank money. Central bank digital currency could start to replace the electronic payment systems that financial institutions use with each other. A more radical idea is to use digital currency, issued and supervised by the central bank, at the retail level to replace physical cash. All these ideas are worth study now. And they’ll still be worth pursuing after the bitcoin bubble bursts. Source: https://www.livemint.com/Opinion/rcSdqv5Gbmi3EW2HXKGziM/Bitcoin-may-be-a-bubble-but-blockchain-is-not.html
Which of the following statements can be concluded about cryptocurrency? (i) It has an unending supply (ii) It is not backed by the government (iii) There is no guarantee of its liquidity

Direction: Read the following passage carefully and answer the questions that follow. Certain words are printed in bold to help you locate them while answering some of these.An influential new recruit has joined the chorus of bitcoin skeptics. The chief investment officer of UBS Plc, the world’s biggest wealth manager, says it’s too risky to be added to the firm’s portfolios—and his assessment is relatively mild. Others have called it “the very definition of a bubble” and even “a fraud”. Those stronger terms are justified, especially after the latest spell of wild price volatility. But the idea underlying bitcoin—blockchain, or distributed-ledger technology—could be transformative. The problem with bitcoin and other so-called digital currencies is that they’re a misuse of this technology. As either a new form of money or an investment, bitcoin has fatal disadvantages. Tokens that are privately created—“mined,” if you insist—can succeed in a limited way as a means of exchange and be used to execute certain kinds of transactions. (Cigarettes in prison are a kind of currency.) But as a reliable store of value, bitcoin is much less useful, because its volatility is so extreme. The value of ordinary currencies is underwritten by governments and stabilized by central banks acting as trusted monopoly producers. Bitcoin and its rivals leave those vital roles vacant. Moreover, bitcoin has no fundamental value as an asset—no stream of future income, no ultimate assurance of liquidity or security, and (unlike gold, say) no alternative use. Its scarcity (hence some floor on its value) is purportedly guaranteed by the underlying technology, but most of its buyers simply take that on trust. Should they come to doubt that guarantee, its price will collapse. In the meantime, bitcoin’s utility as a means of exchange depends on official tolerance—a point rightly emphasized by UBS’s Mark Haefele. That tolerance cannot be taken for granted, especially as bitcoin’s appeal rests so much on the anonymity of its users. At the moment, its comparative advantage is its usefulness for illicit purposes. All this said, the blockchain technology that underlies bitcoin is potentially very powerful. By reducing the need for central intermediaries, it holds out the promise of processing transactions of various kinds more efficiently than today. Many banks and exchanges are exploring these applications. Blockchain technology might also be used one day to produce new kinds of central bank money. Central bank digital currency could start to replace the electronic payment systems that financial institutions use with each other. A more radical idea is to use digital currency, issued and supervised by the central bank, at the retail level to replace physical cash. All these ideas are worth study now. And they’ll still be worth pursuing after the bitcoin bubble bursts. Source: https://www.livemint.com/Opinion/rcSdqv5Gbmi3EW2HXKGziM/Bitcoin-may-be-a-bubble-but-blockchain-is-not.html
Why does the author feel that calling “bitcoin” as “the very definition of a bubble” and even “a fraud” is justified?

Direction: Read the following passage carefully and answer the questions that follow. Certain words are printed in bold to help you locate them while answering some of these.An influential new recruit has joined the chorus of bitcoin skeptics. The chief investment officer of UBS Plc, the world’s biggest wealth manager, says it’s too risky to be added to the firm’s portfolios—and his assessment is relatively mild. Others have called it “the very definition of a bubble” and even “a fraud”. Those stronger terms are justified, especially after the latest spell of wild price volatility. But the idea underlying bitcoin—blockchain, or distributed-ledger technology—could be transformative. The problem with bitcoin and other so-called digital currencies is that they’re a misuse of this technology. As either a new form of money or an investment, bitcoin has fatal disadvantages. Tokens that are privately created—“mined,” if you insist—can succeed in a limited way as a means of exchange and be used to execute certain kinds of transactions. (Cigarettes in prison are a kind of currency.) But as a reliable store of value, bitcoin is much less useful, because its volatility is so extreme. The value of ordinary currencies is underwritten by governments and stabilized by central banks acting as trusted monopoly producers. Bitcoin and its rivals leave those vital roles vacant. Moreover, bitcoin has no fundamental value as an asset—no stream of future income, no ultimate assurance of liquidity or security, and (unlike gold, say) no alternative use. Its scarcity (hence some floor on its value) is purportedly guaranteed by the underlying technology, but most of its buyers simply take that on trust. Should they come to doubt that guarantee, its price will collapse. In the meantime, bitcoin’s utility as a means of exchange depends on official tolerance—a point rightly emphasized by UBS’s Mark Haefele. That tolerance cannot be taken for granted, especially as bitcoin’s appeal rests so much on the anonymity of its users. At the moment, its comparative advantage is its usefulness for illicit purposes. All this said, the blockchain technology that underlies bitcoin is potentially very powerful. By reducing the need for central intermediaries, it holds out the promise of processing transactions of various kinds more efficiently than today. Many banks and exchanges are exploring these applications. Blockchain technology might also be used one day to produce new kinds of central bank money. Central bank digital currency could start to replace the electronic payment systems that financial institutions use with each other. A more radical idea is to use digital currency, issued and supervised by the central bank, at the retail level to replace physical cash. All these ideas are worth study now. And they’ll still be worth pursuing after the bitcoin bubble bursts. Source: https://www.livemint.com/Opinion/rcSdqv5Gbmi3EW2HXKGziM/Bitcoin-may-be-a-bubble-but-blockchain-is-not.html
Which of the following statements is definitely FALSE in the context of the given passage?

Direction: Read the following passage carefully and answer the questions that follow. Certain words are printed in bold to help you locate them while answering some of these.An influential new recruit has joined the chorus of bitcoin skeptics. The chief investment officer of UBS Plc, the world’s biggest wealth manager, says it’s too risky to be added to the firm’s portfolios—and his assessment is relatively mild. Others have called it “the very definition of a bubble” and even “a fraud”. Those stronger terms are justified, especially after the latest spell of wild price volatility. But the idea underlying bitcoin—blockchain, or distributed-ledger technology—could be transformative. The problem with bitcoin and other so-called digital currencies is that they’re a misuse of this technology. As either a new form of money or an investment, bitcoin has fatal disadvantages. Tokens that are privately created—“mined,” if you insist—can succeed in a limited way as a means of exchange and be used to execute certain kinds of transactions. (Cigarettes in prison are a kind of currency.) But as a reliable store of value, bitcoin is much less useful, because its volatility is so extreme. The value of ordinary currencies is underwritten by governments and stabilized by central banks acting as trusted monopoly producers. Bitcoin and its rivals leave those vital roles vacant. Moreover, bitcoin has no fundamental value as an asset—no stream of future income, no ultimate assurance of liquidity or security, and (unlike gold, say) no alternative use. Its scarcity (hence some floor on its value) is purportedly guaranteed by the underlying technology, but most of its buyers simply take that on trust. Should they come to doubt that guarantee, its price will collapse. In the meantime, bitcoin’s utility as a means of exchange depends on official tolerance—a point rightly emphasized by UBS’s Mark Haefele. That tolerance cannot be taken for granted, especially as bitcoin’s appeal rests so much on the anonymity of its users. At the moment, its comparative advantage is its usefulness for illicit purposes. All this said, the blockchain technology that underlies bitcoin is potentially very powerful. By reducing the need for central intermediaries, it holds out the promise of processing transactions of various kinds more efficiently than today. Many banks and exchanges are exploring these applications. Blockchain technology might also be used one day to produce new kinds of central bank money. Central bank digital currency could start to replace the electronic payment systems that financial institutions use with each other. A more radical idea is to use digital currency, issued and supervised by the central bank, at the retail level to replace physical cash. All these ideas are worth study now. And they’ll still be worth pursuing after the bitcoin bubble bursts. Source: https://www.livemint.com/Opinion/rcSdqv5Gbmi3EW2HXKGziM/Bitcoin-may-be-a-bubble-but-blockchain-is-not.html
Which of the following statements can be inferred from the given passage? (i) Many banks are supportive of bitcoin due to its underlying technology that enables efficiency in certain types of transactions (ii) The role of central intermediaries also has an adverse effect on the execution of certain transactions to some extent (iii) The digital currency may soon replace physical cash in the near future