- CFA Exams
- CFA Level I Exam
- Topic 2. Economics
- Learning Module 7. Capital Flows and the FX Market
- Subject 3. Capital Restrictions
CFA Practice Question
Which of the following is NOT considered to be a benefit of capital inflows?
B. Long-term investment by foreign firms can bring in new technology, skills, and management practices.
C. Domestic firms unable to compete will likely be forced to exit the market.
A. Capital can be invested to earn the highest return.
B. Long-term investment by foreign firms can bring in new technology, skills, and management practices.
C. Domestic firms unable to compete will likely be forced to exit the market.
Correct Answer: C
On the other hand, increased competition from foreign firms in the market may force domestic firms to be more efficient.
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