UPSC Prelims 2024— Question 42

The correct answer is option (C). Syndicated loans distribute exposure among multiple lenders, reducing concentration of default risk for an individual lender. A syndicated facility can be structured as a term loan or a revolving credit line, so Statement-II is false. Therefore Statement-I alone is correct. The key to this question is to distinguish the exact constitutional provision, factual association, scientific principle, or current-affairs detail being tested from statements that are partly true but incomplete or incorrectly framed. UPSC often makes the distractors plausible by changing one institutional role, date, classification, geographic association, or causal relationship. Option A — “Both Statement-I and Statement-II are correct and Statement-II explains Statement-I” is incorrect. It does not match the established fact or contains the incorrect combination, institution, relationship, classification, or proposition identified in the explanation above. Choosing it would therefore introduce a factual error or omit a necessary element. Option B — “Both Statement-I and Statement-II are correct, but Statement-II does not explain Statement-I” is incorrect. It does not match the established fact or contains the incorrect combination, institution, relationship, classification, or proposition identified in the explanation above. Choosing it would therefore introduce a factual error or omit a necessary element. Option C — “Statement-I is correct, but Statement-II is incorrect” is correct. It matches the established fact described above and gives the complete combination or identification required by the question. Option D — “Statement-I is incorrect, but Statement-II is correct” is incorrect. It does not match the established fact or contains the incorrect combination, institution, relationship, classification, or proposition identified in the explanation above. Choosing it would therefore introduce a factual error or omit a necessary element. For examination purposes, the safest approach is to verify each statement independently before looking at the answer-code combination. This is particularly important in statement-based questions, because one false clause makes an entire combination wrong. In factual questions, compare the defining characteristic asked in the stem with each alternative rather than relying on superficial familiarity. The answer recorded here follows the verified Set C key used for this database.