Q. Consider the following statements: 

1. FIIs have been permitted to invest in all types of securities except the government securities
2. The investments by FIIs enjoy full capital account convertibility

Which among the above statements is/ are correct ?
Answer: Only 2 is correct
Notes: The correct answer is "Only 2 is correct." 1. FIIs and Government Securities: Foreign Institutional Investors (FIIs) are allowed to invest in various securities, including government securities, under certain conditions. Therefore, the first statement is incorrect. 2. Capital Account Convertibility: FIIs enjoy full capital account convertibility in India, allowing them to freely invest and repatriate funds. This aligns with the second statement, making it correct. Trivia: The concept of capital account convertibility allows for the unrestricted flow of capital in and out of a country, which is crucial for attracting foreign investment.