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Question

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.

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