Which of the Following Is the Best Example of Portfolio

question 56

Multiple Choice

Which of the following is the best example of portfolio investment?

• A)A U.S.company acquires less than 10 percent ownership of a foreign company.
• B)A U.S.company acquires more than 10 ownership of a foreign company.
• C)A foreign bank lends more than 10 percent of the funds needed by a business.
• D)A foreign bank lends less than 10 percent of the funds needed by a business.
• E)The Bank of America extends a loan to a foreign country.

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Definitions:

Fair Value Adjustment

A financial reporting process that adjusts assets or liabilities to their current market value, rather than historical cost.

Valuation Account

A type of accounting balance that is used to adjust the value of a related account, often serving to decrease the value of the primary account.

Adjustment Account

A specific account used to adjust the value of related accounts to reflect accurate financial information.

Offset Account

A bank account that reduces the amount of interest payable on a loan by the amount held in the account.