The financial account consists COMPLETELY of which three components?
A) stock investment, bond investment, and mutual fund investment
B) direct investment, stock investment, and bond investment
C) direct investment, portfolio investment, and other asset investment
D) mutual fund investment, portfolio investment, and stock investment

Question

Quizplus · Accepted Answer

According to the International Monetary Fund's Balance of Payments Manual, the financial account encompasses direct investment, portfolio investment, and other asset investment. Direct investment involves making a physical investment in a foreign company or creating a new foreign enterprise. Portfolio investment includes investments in stocks, bonds, and other securities with the intent of obtaining significant ownership or control of listed companies. Finally, other asset investment includes assets such as derivatives, loans, and deposits. Therefore, option C is the right answer that covers all three components of the financial account.

The Financial Account Consists COMPLETELY of Which Three Components