Which of the following is an example of foreign portfolio investment?
A)the purchase of a U.S.stock by a U.S.citizen
B)the purchase of a U.S.Treasury bond by a German citizen
C)the purchase of a U.S.mutual fund by a U.S.citizen
D)the purchase of a Japanese factory by a Korean citizen

Question

Quizplus · Accepted Answer

Foreign portfolio investment involves the purchase of financial assets such as stocks, bonds, and mutual funds in a foreign country by a foreign investor. Option B describes a German citizen purchasing a US Treasury bond which is an example of foreign portfolio investment. Options A and C involve a US citizen, so they are not foreign portfolio investments. Option D involves the purchase of a physical asset, a Japanese factory, which is not a financial asset and is outside the scope of foreign portfolio investment.

Which of the Following Is an Example of Foreign Portfolio