Consider the following statements with reference to social bonds:1.Social bonds, like any other bonds, are a form of debt instruments in which the issuer (borrower) owes money to the holder (lender).2.Social bonds are a type of bond instrument whose proceeds are exclusively applied to finance or re-finance new and existing commercial projects.3.Social bonds are typically issued by governments, corporations, and non-profit organizations.Which of the statements given above are correct?

Q. Consider the following statements with reference to social bonds::
1.Social bonds, like any other bonds, are a form of debt instruments in which the issuer (borrower) owes money to the holder (lender).
2.Social bonds are a type of bond instrument whose proceeds are exclusively applied to finance or re-finance new and existing commercial projects.
3.Social bonds are typically issued by governments, corporations, and non-profit organizations.
Which of the statements given above are correct?

[A] 1 and 2 only

[B] 2 and 3 only

[C] 1 and 3 only

[D] 1, 2 and 3

Answer: C

Notes:

Explanation –

Statements 1 and 3 are correct. Social bonds, like any other bonds, are a form of debt instruments in which the issuer (borrower) owes money to the holder (lender). Social bonds are typically issued by governments, corporations, and non-profit organizations.

Statement 2 is incorrect. Social bonds are not exclusively used to finance or refinance commercial projects. Commercial projects are financed by other types of bonds, such as corporate bonds and project bonds. Social bonds are specifically designed to finance projects that have a social benefit.

Source: ForumIAS

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