Indian Government Bond Yields are influenced by which of the following? 1. Actions of the United States Federal Reserve 2. Actions of the Reserve Bank of India 3. Inflation and short-term interest rates Select the correct answer using the code given below.

1. Statement 1 is correct. Actions of the United States Federal Reserve, such as changes in interest rates or quantitative easing/tightening, affect global liquidity and capital flows. Decisions by the Fed can influence foreign investor appetite for emerging market debt, including Indian Government Bonds, thereby impacting their yields. 2. Statement 2 is correct. Actions of the Reserve Bank of India (RBI), including changes in the repo rate, cash reserve ratio (CRR), statutory liquidity ratio (SLR), and conducting Open Market Operations (OMOs), directly influence domestic liquidity, interest rates, and investor expectations, all of which significantly impact Indian Government Bond Yields. 3. Statement 3 is correct. Inflation erodes the real return on bonds. Higher current or expected inflation leads investors to demand higher nominal yields to compensate for the loss of purchasing power. Short-term interest rates, heavily influenced by RBI policy and market liquidity, serve as a benchmark and affect the cost of funds, thus influencing bond yields across the curve. Therefore, all three factors influence Indian Government Bond Yields.