Which of the Following Combinations Is Plausible for a Nation's

question 208

Multiple Choice

Which of the following combinations is plausible for a nation's balance of payments? (All numbers in billions.)

• A) current account = 10, capital account = 40, official reserve transaction account = 50
• B) current account = 40, capital account = 20, official reserve transaction account = -50
• C) current account = 50, capital account = -30, official reserve transaction account = 20
• D) current account = 30, capital account = -20, official reserve transaction account = -10

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Definitions:

Risk Aversion

The preference for lower risk options over higher risk ones, even if the latter could result in higher returns.

Security Market Line

A representation in finance that shows the expected return of investments at different levels of risk, based on the capital asset pricing model (CAPM).

Beta

A gauge of the variability of a stock's value relative to the comprehensive market.

Market Average

A statistical measure that represents the overall market or a specific segment of it, commonly used to track market performance.