Practicing Success
In the balance of payment account, portfolio investment is a part of___________. |
Post office Account Capital Account Current Account Bank Account |
Capital Account |
The correct answer is Capital Account. The balance of payments (BOP) is a record of all economic transactions between a country and the rest of the world over a specific period of time, usually a year. It is divided into two main accounts: the current account and the capital and financial account.
Portfolio investment is a type of investment in which a person or institution purchases financial assets, such as stocks, bonds, or mutual funds, from a non-resident. These investments can be either long-term or short-term. Portfolio investment is recorded in the capital and financial account of the BOP. Therefore, portfolio investment is a part of the Capital Account. The other options are incorrect:
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