Which of the following is true? The component of the current account include direct foreign investment and portfolio investment. The transaction regarding an Australian consulting firm receiving AUD5 million (i.e., Australian 5 million dollars) for consulting services provided to a German company is recorded as a debit under the current account of Australia. The transaction regarding a U.S. citizen receiving an interest payment as a result of his investment in a bond of a British firm issued in the United Kingdom is recorded as a credit under the current account of U.S.. When the BOP (balance of payment) accounts are recorded correctly, by BOP identity, under purely floating exchange rate regime, BCA (balance of current accounts)+BKA (balance of capital accounts) = - BRA (Balance of official reserve accounts),
Which of the following is true? The component of the current account include direct foreign investment and portfolio investment. The transaction regarding an Australian consulting firm receiving AUD5 million (i.e., Australian 5 million dollars) for consulting services provided to a German company is recorded as a debit under the current account of Australia. The transaction regarding a U.S. citizen receiving an interest payment as a result of his investment in a bond of a British firm issued in the United Kingdom is recorded as a credit under the current account of U.S.. When the BOP (balance of payment) accounts are recorded correctly, by BOP identity, under purely floating exchange rate regime, BCA (balance of current accounts)+BKA (balance of capital accounts) = - BRA (Balance of official reserve accounts),
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:Which of the following is true?
The component of the current account include direct foreign investment and
portfolio investment.
The transaction regarding an Australian consulting firm receiving AUD5 million
(i.e., Australian 5 million dollars) for consulting services provided to a German
company is recorded as a debit under the current account of Australia.
The transaction regarding a U.S. citizen receiving an interest payment as a
result of his investment in a bond of a British firm issued in the United Kingdom
is recorded as a credit under the current account of U.S..
When the BOP (balance of payment) accounts are recorded correctly, by BOP
identity, under purely floating exchange rate regime, BCA (balance of current
accounts) + BKA (balance of capital accounts) = - BRA (Balance of official reserve
accounts).
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