Direction In the question below are given a statement followed by three courses of actions numbered ...........

Logical Reasoning(IBPS PO) Statement - Courses of Action

Direction: In the question below, are given a statement followed by three courses of actions numbered I, II and III. On the basis of the information given, you have to assume everything in the statement to be true, and then decide which of the suggested courses of action logically follow(s) for pursuing.

Statement: The new methodology to calculate foreign ownership limit that global index provider MSCI has proposed could lead to a sharp outflow from Indian stocks.

Courses of action:

I. The overall weight of India in the MSCI Emerging Markets (EM) index is expected to fall by 25 basis points to 8.55 per cent if the proposal goes into effect.

II. MSCI will seek to exclude the shares being offered through global and American depository receipts (GDRs, ADRs) while calculating foreign ownership limits.

III. While determining the weight of a company, MSCI will take into consideration parameters including the foreign inclusion factor (FIF),

which determines the total proportion of shares of a company that offshore investors can buy from exchanges.

Only III follows

Both I and III follow

Both II and III follow

Only I follows

All follow

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Master Statement - Courses of Action

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Explanation:

The correct answer is option 3, i.e. Both II and III follow.
A course of action is something that needs to be done considering the present scenario in mind.
From the given statement, we can infer that a suitable course of action should be the course of action followed by the MSCI
for proceeding with its new methodology or the action taken by India to stabilize its stocks.
Course of action (I) can be rejected as it is not an action. It is the effect of the said proposal on the overall weight of India in the EM index.
Course of action (II) is a suitable course of action followed by MSCI to proceed with its said proposal.
Based on similar grounds, course of action (III) is also correct as it is in the same direction and highlights the action
that will be followed by the MSCI to carry out the said proposal effectively. Thus, all the course of actions except I are relevant and as a result the correct answer is option 3.

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