A German mutual fund sells euros to a U.S.bank for $20,000.The mutual fund then uses these dollars to purchase a bond issued by United Express,a U.S.delivery company.As a result of these two transactions,what happened to U.S.net capital outflow?

Question

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The first transaction is a capital outflow from the U.S. (the U.S. bank is buying euros from the German mutual fund). The second transaction is a capital inflow to the U.S. (the German mutual fund is buying a bond issued by a U.S. company). The net effect of these two transactions is zero, so U.S. net capital outflow is unchanged.

A German Mutual Fund Sells Euros to a U