- CFA Exams
- CFA Level I Exam
- Topic 2. Economics
- Learning Module 14. International Trade and Capital Flows
- Subject 4. The Balance of Payments
CFA Practice Question
A firm in Peru purchases stock (less than 5%) in a U.S. company. The transaction should be recorded in the U.S. balance of payments as a ______ on the ______ account.
B. credit; capital
C. debit; capital
A. credit; financial
B. credit; capital
C. debit; capital
Correct Answer: A
Capital inflow: credit. Financial assets: financial account.
User Contributed Comments 3
| User | Comment |
|---|---|
| Inaganti6 | what would the offsetting transaction look like ? |
| choas69 | i guess by the same amount the U.S makes a purchase on current acc. |
| khalifa92 | or that firm had a dollars from a previous transaction which is getting offsetted now |