- CFA Exams
- CFA Level I Exam
- Study Session 5. Economics (2)
- Reading 17. International Trade and Capital Flows
- Subject 4. The Balance of Payments
CFA Practice Question
Which of the following would be recorded as a credit in the U.S. balance of payments accounts?
A. The purchase of a German business by a U.S. investor
B. European travel expenditures of an American college student
C. The purchase of a U.S. Treasury bond by a French investment company
Explanation: Since the purchase of a bond by a French company decreases the supply of U.S. dollars on the foreign exchange market, this transaction is accounted for as a credit on the U.S. balance of payments account.
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