Read the following passage and answer the question that follows:

The Global Financial Stability Report finds that the share of portfolio investments from advanced economies in the total debt and equity investments in emerging economies has doubled in the past decade to 12 percent. The phenomenon has implications for Indian policy makers as foreign portfolio investments in the debt and equity markets have been on the rise. The phenomenon is also flagged as a threat that could compromise global financial stability in a chain reaction, in the event of United States Federal Reserve's imminent reversal of its "Quantitative Easing" policy.

Which among the following is the most rational and critical inference that can be made from the above passage?

Question

Read the following passage and answer the question that follows:

The Global Financial Stability Report finds that the share of portfolio investments from advanced economies in the total debt and equity investments in emerging economies has doubled in the past decade to 12 percent. The phenomenon has implications for Indian policy makers as foreign portfolio investments in the debt and equity markets have been on the rise. The phenomenon is also flagged as a threat that could compromise global financial stability in a chain reaction, in the event of United States Federal Reserve's imminent reversal of its "Quantitative Easing" policy.

Which among the following is the most rational and critical inference that can be made from the above passage?

Accepted Answer

Correct Option: (D) Emerging economies are at a risk of shock from advanced economies.

Which among the following is the most rational and critical inference that can be made from the above passage?

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