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 above

Question

Quizplus · Accepted Answer

Direct investment involves acquiring controlling interests in foreign businesses. This could include buying a foreign company, establishing a subsidiary or joint venture, or investing in production facilities or equipment overseas. The other options, portfolio investment and other investment, do not involve such direct ownership or control.

The Capital Account Is Divided into Three Subcategories: Direct Investment