A bond whose proceeds are used only to finance or refinance a combination of both environmental and social projects is called :
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Answer: C. A sustainability bond funds a mix of green (environmental) and social projects. A green bond funds only environmental projects and a social bond only social projects.
Watch for: Students pick Green Bond because it is the best known.
Why the other options are wrong
- A. Wrong because green bonds fund only environmental projects.
- B. Wrong because social bonds fund only social projects.
- D. Wrong because a sovereign bond is defined by its issuer (a government), not by use of proceeds.
Source to check: International Capital Market Association (icmagroup.org), Sustainability Bond Guidelines; SEBI framework on ESG debt securities
Answer from the provisional UPSC key; it may change when the final key is out. Written and fact-checked by AI against the official key. Spotted a mistake? Report it.