Explain the effect of foreigners’ portfolio investments, Financial Management

Assignment Help:

As the early 1980s, foreign portfolio investors have purchased an important portion of U.S. treasury bond issues. Discuss the short-term and long-term influences of foreigners’ portfolio investment on the U.S. balance of payments.

As foreigners purchase U.S. Treasury bonds, U.S. BOP will enhance in the short run. Although in the long run, U.S. BOP may deteriorate since the U.S. should pay interests and principals to foreigners. If foreign funds are employed productively and contributes to the competitiveness of U.S. industries, though, U.S. BOP may enhance in the long run.


Related Discussions:- Explain the effect of foreigners’ portfolio investments

Explain investment opportunity schedule, What is the investment opportunity...

What is the investment opportunity schedule (IOS)?  How does it help financial managers make business decisions? The investment opportunity schedule depicts graphically propose

Callable bonds and puttable bonds, Convertible bonds can be classified into...

Convertible bonds can be classified into different types such as callable bonds and puttable bonds. These bonds are discussed as follows: Basics of Callable Bonds A callabl

Write out the equation or draw the budget line, You have $21 to spend on pr...

You have $21 to spend on prawns and potatoes. Prawns cost $20 per kilo and potatoes cost $2 per kilo.   (a) Supposing you can buy as much or as little as you want of prawns and

Stock on tap, Stock on Tap: Most of the players who invest in these sec...

Stock on Tap: Most of the players who invest in these securities are institutions and hence the volumes are high. Considering that these securities are the first choice for ban

Obtain a market arbitrage position, (a) One could obtain a market arbitrag...

(a) One could obtain a market arbitrage position as follows: buy Honeywell shares as well as sell General Electric shares. If the merger gets place the Honeywell shares will conve

Receivables management, Receivables Management The decision on whether...

Receivables Management The decision on whether to grant or not to grant credit to a particular customer can be taken if certain subjective probabilities of the payment pattern

Illustrate the zero bonds security instruments, Illustrate the zero bonds s...

Illustrate the zero bonds security instruments. Zero coupon bonds are instruments under that a borrower promises, at the recent time, to pay one exact nominal sum (face value)

What is the investment evaluation, What is the Investment evaluation I...

What is the Investment evaluation Investment evaluation the primary purpose of measuring the cost of capital is its use as a financial standard evaluating investment projects

Longer-term bonds and short-term bonds, Questions How is a bond like...

Questions How is a bond like a loan?                                               How does an investor receive a return from buying a bond?  Does a bond's yield to ma

Explain zero coupon bonds, Explain Zero coupon bonds The bonds that are...

Explain Zero coupon bonds The bonds that are sold at a discount from face value and do not pay any coupon interest over their life are known as Zero coupon bonds. At maturity t

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd