If a Japanese Mutual Fund Buys a Share of Stock

question 209

Multiple Choice

If a Japanese mutual fund buys a share of stock on the New York Stock Exchange,it will be accounted for as:

• A) a subtraction from the U.S.current account.
• B) an addition to the U.S.current account.
• C) a subtraction from the U.S.capital account.
• D) an addition to the U.S.capital account.

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Definitions:

Equal Payments

Equal payments refer to the financial concept where the amount of money paid in each installment of a loan or investment is the same throughout the term.

19th Payment

Refers to the nineteenth installment in a series of scheduled payments for a loan or mortgage.

Compounded Semi-Annually

The calculation of interest where the frequency of compounding is twice a year, leading to interest on interest during these periods.

Reduction of the Principal

The process of decreasing the initial amount of money borrowed or invested over time.