CFA Practice Question

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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.

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
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