At the beginning of 2014 Country A's Net International Investment Position is - at book (or...

 

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At the beginning of 2014 Country A's Net International Investment Position is - at book (or accounting) value - equal to $0. During 2014 Country A's residents purchase shares in Country B's stock market for $500, and Country A's government sells treasury bonds to Country B's residents for $500. Country A's Current Account Balance in 2014 and 2015 is 0, and no other financial account entries are recorded in Country A's balance of payments. At the end of 2015, however, Country B's shares owned by Country A residents have increased their value by 5%, while the Country A's treasury bonds owned by Country B's residents have gained 10% of their original market value. What is the market value of Country A's Net International Investment Position at the end of 2015? At the beginning of 2014 Country A's Net International Investment Position is - at book (or accounting) value - equal to $0. During 2014 Country A's residents purchase shares in Country B's stock market for $500, and Country A's government sells treasury bonds to Country B's residents for $500. Country A's Current Account Balance in 2014 and 2015 is 0, and no other financial account entries are recorded in Country A's balance of payments. At the end of 2015, however, Country B's shares owned by Country A residents have increased their value by 5%, while the Country A's treasury bonds owned by Country B's residents have gained 10% of their original market value. What is the market value of Country A's Net International Investment Position at the end of 2015?

Answer rating: 100% (QA)

At the beginning of 2014 Country As Net International Investment Position NIIP is at book value whic... View the full answer