What Are the Main Forms Through Which Foreign Capital Flows

question 30

Essay

What are the main forms through which foreign capital flows into LDCs? Discuss the evolution of the various forms over the last decade.

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Definitions:

Index Fund

A type of mutual fund or exchange-traded fund (ETF) designed to follow the components of a market index, such as the S&P 500, to provide broad market exposure with low operating expenses.

Serial Correlation

The association between successive observations of the same variable, such as stock returns, over time.

Tax-Loss Selling

The strategy of offloading securities at a loss in order to reduce the liability of capital gains tax.

Trading Pattern

The analysis of price movements in financial markets to anticipate future movements based on historical, statistical trends.