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FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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QUESTION 7 At the beginning of 2014 Country A's Net International Investment Position is - at book (or accounting) value - equal to $0. During 2014 Country A's residents purchase shares in Country B's stock market for $500, and Country A's govemment sells treasury bonds to Country B's residents for $500. Country A's Current Account Balance in 2014 and 2015 is 0, and no other financial account entries are recorded in Country A's balance of payments. At the end of 2015, however, Country B's shares owned by Country A residents have increased their value by 10%, while the Country A's treasury bonds owned by Country B's residents have increased by 15% of their original market value. What is the market value of Country A's Net International Investment Position at the end of 2015? -75 25 O25 75
Transcribed Image Text:QUESTION 7 At the beginning of 2014 Country A's Net International Investment Position is - at book (or accounting) value - equal to $0. During 2014 Country A's residents purchase shares in Country B's stock market for $500, and Country A's govemment sells treasury bonds to Country B's residents for $500. Country A's Current Account Balance in 2014 and 2015 is 0, and no other financial account entries are recorded in Country A's balance of payments. At the end of 2015, however, Country B's shares owned by Country A residents have increased their value by 10%, while the Country A's treasury bonds owned by Country B's residents have increased by 15% of their original market value. What is the market value of Country A's Net International Investment Position at the end of 2015? -75 25 O25 75
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