A USCitizen Buys a Newly Issued Share of Stock in England,paying

question 17

Multiple Choice

A U.S.citizen buys a newly issued share of stock in England,paying for his order with a check,which the British company deposits in its own U.S.bank account in New York.How is this transaction accounted for in the balance of payments?

• A) financial account, U.S. asset export
• B) current account, U.S. service import
• C) current account, British good export
• D) financial account, British asset import
• E) financial account, U.S. asset import

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Definitions:

Straight-Line Method

A method of depreciation that allocates an equal amount of the depreciable cost of an asset to each year of its useful life.

Carrying Value

The net amount at which an asset or liability is reported on the balance sheet, calculated as original cost minus any depreciation, amortization, or impairment costs.

Common Stock

A type of security that represents ownership in a corporation, with holders having a claim on the company's earnings and assets.

Income Tax Rate

The percentage at which an individual or corporation is taxed on their income.