Barriers to cross-border capital flows limit the ability of capital to roam the world freely in search of the highest risk-adjusted return; consequently,at any one time,there may be too much capital invested in some markets and too little in others.

Question

Quizplus · Accepted Answer

Cross-border investment barriers such as restrictions on foreign investment or capital controls can limit the ability of capital to move freely, leading to imbalances in capital flows and investment patterns. Therefore, the statement is true.

Barriers to Cross-Border Capital Flows Limit the Ability of Capital