Question

Balance of payments

In a certain month, foreign investors purchased $375 million of Danish securities and sold $425 million of Danish securities they had previously purchased. In the same month, Danish investors purchased $300 million of foreign securities and sold $250 million of foreign securities they had previously purchased. What single entry in the Denmark’s balance of payment for the month will reflect all of those transactions? What will the value of that entry for that month be?

Answer 1

ANSWER :-

Foreign Investor purchased = $ 375 million

Danish Securities and sold worth =$425 million

Aggregate foreign cash flow = $ 375 - $ 425

Aggregate foreign cash flow  = - $ 50 million

Danish investor purchased foreign securities $ 300 million

Sold securities worth $ 250 million

Domestic investors cash flow = -$ 300 + $ 250

= - $ 50 million

Therefore,Net Cash Flow = - $ 50 - $ 50

= - $ 100 million

Balance of Payment = - $ 100 million.

---------------------------------------------------------------

if you have any query please ask me in comment box i am here to helps you don't give direct Thumbs down.if you satisfied my work give Thumbs UP

                                                ******THANK YOU*******