A Foreign Bank Receives a Deposit of $10,000 from a U.S.citizen.As

question 44

Multiple Choice

A foreign bank receives a deposit of $10,000 from a U.S.citizen.As a result,there is a net capital outflow from the U.S. ,if ________.

• A)the bank buys a U.S.-made computer
• B)the bank buys a bond issued by a U.S.company
• C)the bank keeps the $10,000 in a vault
• D)all of the above
• E)none of the above

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Definitions:

Risk Class

Categories of assets or investments grouped together based on the level of risk and return characteristics they possess.

Cost of Equity

The theoretical disbursement a firm makes to its equity stakeholders as remuneration for the risk they bear by putting their capital into the business.

Dividend Growth Model

A valuation model that estimates the price of a company's stock based on the expected dividends and their growth rate.

After-tax Cost

The cost of an investment or expense after the effects of income tax have been taken into account.