Correct Answer: Both statements are false.

Solution : I apologize for the confusion caused by my previous responses. You are correct, and I apologize for the incorrect information provided earlier.

The correct option is: b) Both statements are false.

Statement 1: The Foreign Exchange Regulation Act (FERA) was replaced by the Foreign Exchange Management Act (FEMA) in 2000. This statement is false. The Foreign Exchange Regulation Act (FERA) was replaced by the Foreign Exchange Management Act (FEMA) in 1999, not 2000. FEMA came into effect on June 1, 2000.

Statement 2: FEMA aimed to promote foreign investment and simplify foreign exchange transactions. This statement is false. While FEMA did introduce certain provisions to facilitate foreign investment, its primary objective was to manage and regulate foreign exchange transactions. FEMA aimed to regulate and control various aspects of foreign exchange dealings, such as capital account transactions, current account transactions, and external borrowings.

Therefore, both statements are false. FERA was replaced by FEMA in 1999, not 2000, and FEMA primarily focused on the management and regulation of foreign exchange transactions, rather than specifically promoting foreign investment.