The capital account is divided into three subcategories: direct investment,portfolio investment,and other investment.Direct investment involves
A)acquisitions of controlling interests in foreign businesses.
B)investments in foreign stocks and bonds that do not involve acquisitions of control.
C)bank deposits,currency investment,trade credit,and the like.
D)all of the options

Question

Quizplus · Accepted Answer

Direct investment refers to the acquisition of controlling interests in foreign businesses, such as buying a majority stake in a company or setting up a subsidiary in a foreign country. The other two subcategories, portfolio investment, and other investment refer to investments in stocks, bonds, and other financial assets that do not involve controlling interests in a foreign business. Therefore, the best choice is A.

The Capital Account Is Divided into Three Subcategories: Direct Investment,portfolio