The capital account may be divided into three categories:
A)cross-border mergers and acquisitions, portfolio investment, and other investment.
B)direct investment, portfolio investment, and Cross-border mergers and acquisitions.
C)direct investment, mergers and acquisitions, and other investment.
D)direct investment, portfolio investment, and other investment.

Question

Quizplus · Accepted Answer

The three categories of the capital account are direct investment (such as building a new factory or acquiring a company outright), portfolio investment (investing in stocks or bonds), and other investment (such as lending to a foreign government or buying real estate). Cross-border mergers and acquisitions fall under the category of direct investment, so option A is not the best choice. Option B has the correct categories but in the wrong order. Option C incorrectly separates mergers and acquisitions into two categories. Option D accurately lists the categories of the capital account.

The Capital Account May Be Divided into Three Categories