Tony, a Canadian Citizen, Uses Some Previously Obtained Portuguese Currency

question 97

Multiple Choice

Tony, a Canadian citizen, uses some previously obtained Portuguese currency (escudo) to purchase a bond issued by a Portuguese company. How does this transaction affect Canadian net capital outflow?

• A)It increases Canadian net capital outflow by more than the value of the bond.
• B)It increases Canadian net capital outflow by the value of the bond.
• C)It does not change Canadian net capital outflow.
• D)It decreases Canadian net capital outflow.

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