Problem
During the past year, several large banks extended $200 million in loans to the government and several firms in a developing nation. International investors also purchased $150 million in bonds and $350 million in stocks issued by domestic firms. Of the stocks that foreign investors purchased, $100 million were shares that amounted to less than a 10 percent interest in domestic firms. This was the first year this nation had ever permitted inflows of funds from abroad.
a. Based on the investment category definitions discussed in this chapter, what was the amount of portfolio investment in this nation during the past year?
b. What was the amount of foreign direct investment in this nation during the past year?
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.