The capital account may be divided into three categories-

Question

Quizplus · Accepted Answer

The capital account is generally divided into three broad categories- direct investment, portfolio investment, and other investment. The other investment category includes items like trade credits, loans, currency and deposits, and other claims and liabilities. While cross-border mergers and acquisitions are a form of direct investment, it falls under the direct investment category rather than a separate category on its own. Therefore, option B and option A are incorrect. Option C is incorrect because mergers and acquisitions are a type of direct investment, and it fails to include portfolio investment and other investment. Thus, the best choice is D.

The Capital Account May Be Divided into Three Categories-