Foreign Citizens Would Be More Likely to Engage in Foreign

question 178

Multiple Choice

Foreign citizens would be more likely to engage in foreign portfolio investment in the U.S.if,compared to their country's assets,U.S.assets had

• A)a higher interest rate and a higher default risk.
• B)a higher interest rate and a lower default risk.
• C)a lower interest rate and higher default risk.
• D)a lower interest rate and a lower default risk.

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Definitions:

Common Stock

Common stock represents ownership shares in a corporation, giving holders voting rights and a share in the company's profits through dividends.

Par Value

A nominal value assigned to share of stock in the charter of a corporation, unrelated to market value.

Legal Expense

Costs incurred in the process of legal advice, litigation, or other legal services.

Paid-In Capital

Funds raised by a company through the sale of its shares to investors, over and above the par value of these shares.