UPSC Quiz – 2021 : IASbaba’s Daily Current Affairs Quiz 4th December 2021

Solution (a)

Credit default swaps (CDS) are a type of insurance against default risk by a particular company. The company is called the reference entity and the default is called credit event. It is a contract between two parties, called protection buyer and protection seller. Under the contract, the protection buyer is compensated for any loss emanating from a credit event in a reference instrument. In return, the protection buyer makes periodic payments to the protection seller.

In the event of a default, the buyer receives the face value of the bond or loan from the protection seller. From the seller’s perspective, CDS provides a source of easy money if there is no credit event. 

CDS was introduced by JP Morgan.

There are different varieties of CDS, like binary CDS, basket CDS, contingent CDS and dynamic CDS.

There are different types of credit events such as bankruptcy, failure to pay, and restructuring.

If the credit event does not occur before the maturity of the loan, the protection seller does not make any payment to the buyer.

Asset-backed securities (ABS) is the most common type of CDS

Counter-party concentration risk and hedging risk are the major risks in the CDS market.

Article Link:

https://economictimes.indiatimes.com/definition/credit-default-swaps

Solution (b)

What is El Salvador’s Bitcoin city?

El Salvador’s “Bitcoin City” would be funded with the issuance of a $1 billion Bitcoin Bond. The city will be located along the Gulf of Fonseca near a volcano.

El Salvador, the only country to recognise Bitcoin as a legal tender, is planning to build an entire city based on the largest cryptocurrency Bitcoin

The city will be built near the Conchagua volcano to take advantage of the country’s geothermal energy— to power both the city and cryptocurrency mining —an energy consuming process of solving complex mathematical calculations day and night to verify and add crypto coins to the Blockchain network.

The residents of Bitcoin city won’t have to pay any income, property, capital gains or even payroll taxes. The city would be built with attracting foreign investment in mind.

El Salvador, officially the Republic of El Salvador, is a country in Central America. It is bordered on the northeast by Honduras, on the northwest by Guatemala, and on the south by the Pacific Ocean.

Article Link:

https://indianexpress.com/article/explained/explained-el-salvador-bitcoin-city-7635303/

Solution (b)

The Wanchuwa festival is one of the most important celebrations in the life of the Tiwa tribe of Assam — a community that centers itself around a traditional form of agriculture

There are more of them spread out in the plains and in the neighbouring state of Meghalaya too.

The Tiwas practice Jhum or shifting cultivation, where the land is first cleared of any vegetation that is later set on fire (slash-and-burn). The result is a more fertile soil that is freshly enriched with potash, all the more useful for a bountiful crop.

As with most tribal cultures, with every harvest comes song and dance

Wanchuwa is one of the most important festivals of the Tiwa tribal community living in the hills because of its connection with agriculture — the mainstay of their economy. Tiwas pray for a bountiful harvest as well as protection from pests and natural calamities.

Tiwa (Lalung) is an ethnic group mainly inhabiting the states of Assam and Meghalaya in northeastern India. They are also found in some areas of Arunachal Pradesh, Manipur and Nagaland. They are recognized as a Scheduled tribe within the State of Assam.

Article Link:

https://www.thehindubusinessline.com/multimedia/photo/photos-of-the-day-august-18-2021/article35974879.ece/photo/1/

Solution (b)

Output from India’s eight core sectors grew 7.5% in October, picking up pace from the revised 4.5% growth estimate for September, with all sectors, except crude oil, recording positive growth.

On a month-on-month basis, output was 7.3% higher in October compared to September’s seven-month low print of the Index of eight core industries. These sectors account for 40.27% of the weight of items included in the Index of Industrial Production (IIP).

Steel production growth hit an 11-month low of 0.9%. Crude oil output, which has been consistently shrinking for several months now. Year-on-year growth in fertilisers production remained positive for the second month in a row, but only just at 0.04%

Natural gas and refinery products recorded a healthy growth of 25.8% and 14.4%, respectively

The eight core sector industries include coal, crude oil, natural gas, refinery products, fertiliser, steel, cement and electricity

The eight core industries comprise 40.27% of the weight of items included in the Index of Industrial Production (IIP).

The eight Core Industries in decreasing order of their weightage: Refinery Products > Electricity > Steel > Coal > Crude Oil > Natural Gas > Cement > Fertilizers.

Article Link:

https://www.thehindu.com/business/Economy/core-sectors-growth-bounces-back-in-october/article37771094.ece

Solution (b)

Hazara: A community historically oppressed in Afghanistans

The Hazaras of Afghanistan have long faced persecution from the Taliban and Islamic State, for their ethnicity and religious beliefs.

So, who are the Hazaras?

The Hazaras are one of Afghanistan’s largest ethnic minorities, accounting for up to 20 percent of Afghanistan’s 30 million inhabitants.

The group is largely found in the mountainous region of Hazarajat in central Afghanistan. They are believed to be descendants of Genghis Khan and his army that overran the region during the 13th century.

Around 1773, Hazarajat was annexed and made part of the Afghan empire under Ahmad Shah Durrani. The Sunni Muslim majority under the Pashtun ruler resulted in marginilisation of the Shia Hazara community, which was forced to leave fertile lowlands in central Afghanistan in the 18th and 19th centuries and settle in the dry, mountainous landscape.

They have been a target of the Taliban because they are primarily Shia; Afghanistan is predominantly Sunni. Their distincive features and the dialect they use, Hazaragi, also set them apart.

Article Link:

https://indianexpress.com/article/explained/explained-who-are-hazaras-of-afghanistan-taliban-7461859/