The financial account consists COMPLETELY of which three components?
A)Stock investment, bond investment, and mutual fund investment.
B)Direct investment, stock investment, and bond investment.
C)Direct investment, portfolio investment, and other asset investment.
D)Mutual fund investment, portfolio investment, and stock investment.

Question

Quizplus · Accepted Answer

The financial account consists of three components: direct investment, portfolio investment, and other asset investment. Direct investment is a category of cross-border investment associated with a resident in one economy acquiring a lasting interest in an enterprise resident in another economy. Portfolio investment refers to transactions that do not qualify as direct investment, where an investor invests in securities of foreign companies, such as stocks and bonds. Other asset investment refers to the transactions that do not fit into the categories of direct or portfolio investment, such as trade credits and loans. Therefore, option C is the correct answer. The other options include only two out of the three components of the financial account.

The Financial Account Consists COMPLETELY of Which Three Components