OK - I re-Read this last night (again). There was a big argument a couple weeks ago so last night I reviewed the CFAI (again) and compared it the schweser. - This year, the LOS only says Describe the BOP accounts. I’m not sure what the LOS said last year. The only thing that the CFAI book has that Schweser does not (but actually implies without the formula), that I can see is the actual formula for calcing out the value of the Current Account. Which is = NX (exports less imports) + Interest Income + Net Transfers. Tattoo it in your brain just in case right, sounds like this might have been the catch people are yelling about from last year but I’m not sure if that is accurate. .
No need to worry, BOP is so last year. You won’t see a question on it during this test. Just my theory.
HA, likely. - probably an entire vignette on taxes.
Note: its actually not just Interest Income, its also dividend income (i.e. the middle term includes Net factor income from abroad). I.e. interest dividends received from our investments in foreign co.s increases current account, payment of int/div to foreign investors decrease current account.
Infinitesun Wrote: ------------------------------------------------------- > OK - I re-Read this last night (again). There was > a big argument a couple weeks ago so last night I > reviewed the CFAI (again) and compared it the > schweser. - This year, the LOS only says Describe > the BOP accounts. > > I’m not sure what the LOS said last year. > > The only thing that the CFAI book has that > Schweser does not (but actually implies without > the formula), that I can see is the actual formula > for calcing out the value of the Current Account. > > > Which is = NX (exports less imports) + Interest > Income + Net Transfers. > > Tattoo it in your brain just in case right, sounds > like this might have been the catch people are > yelling about from last year but I’m not sure if > that is accurate. > > . > Which is = NX (exports less imports) + Interest > Income + Net Transfers You also need to account exchange of good and service
From a previous discussion: “ITS IX” Interest Transfers (net) Service Payments (net) Imports (Exports)
In CFAI they add Net Income too in the current account. The unrequited transfered were pushed to capital account. I think I am still confused.