A U.S.mutual fund buys stocks issued by a Columbian company.This purchase is an example of
A)U.S.foreign direct investment.It increases Columbia's net capital outflow.
B)U.S.foreign direct investment.It decreases Columbia's net capital outflow.
C)U.S.foreign portfolio investment.It decreases Columbia's net capital outflow.
D)U.S.foreign portfolio investment.It increases Columbia's net capital outflow.

Question

Quizplus · Accepted Answer

The purchase of stocks by a U.S. mutual fund in a Colombian company is an example of U.S. foreign portfolio investment, as it involves holding securities (stocks) in a foreign company without direct control or ownership. This investment decreases Columbia's net capital outflow as it represents an inflow of foreign capital into the country.

A USMutual Fund Buys Stocks Issued by a Columbian Company