Which of the following constitute Capital Account? 1. Foreign Loans 2. Foreign Direct Investment 3. Private Remittances 4. Portfolio Investment Select the correct the answer using the codes given below.
A
1, 2 and 3
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B
1, 2 and 4
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C
2, 3 and 4
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D
1, 3 and 4
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Solution
The correct option is B 1, 2 and 4 Capital account shows the net change in the physical or financial asset ownership for a country. It includes Foreign Direct Investment, Portfolio Investment, foreign loans, changes in reserve account etc. Private remittances come under Current account and not Capital account.