Which of the Following Would Be an Example of Direct

question 243

Multiple Choice

Which of the following would be an example of direct foreign investment in DVCs?

• A) a grant from the World Bank to build an irrigation project in Kenya
• B) the financing of a new chemical plant in Peru by a German company
• C) a low-interest loan from the U.S. government to Turkey to purchase military hardware
• D) a loan from the Japanese government to the Indonesian government to pay for electronic equipment

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Definitions:

Accrued Interest

Interest that has accumulated but remains unpaid.

360-Day Year

A financial convention that simplifies interest calculation by assuming a year has 360 days.

Commission

A fee paid for services, usually a percentage of the total cost.

Current Yield

The annual interest income of a bond, calculated by dividing the annual interest by the current purchase price.