The correct option is "I and II only" because the Reserve Bank of India (RBI) generates income primarily through its activities related to monetary policy and foreign exchange management. Buying and selling government bonds (I) allows the RBI to regulate the money supply and manage interest rates, while transactions involving foreign currency (II) help maintain the stability of the Indian rupee and facilitate international trade. Other options like pension fund management (III) and lending to private companies (IV) are not primary functions of the RBI, and printing currency (V) involves costs rather than income generation.