When categorizing investments for the financial account component of the balance of payments the ________ is an investment where the investor has no control whereas the ________ is an investment where the investor has control over the asset.
A) direct investment; portfolio investment
B) direct investment; indirect investment
C) portfolio investment; indirect investment
D) portfolio investment; direct investment

Question

Quizplus · Accepted Answer

When categorizing investments in the financial account component of the balance of payments, the portfolio investment is an investment where the investor has no control, and the direct investment is an investment where the investor has control over the asset. Therefore, option D, with the reversed order, is the correct answer.

When Categorizing Investments for the Financial Account Component of the Balance