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Balance of Financial Account Formula

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Balance of Financial Account is the difference between all money flowing into the country in a particular period of time (e.g., a quarter or a year) and the outflow of money to the rest of the world. Check FAQs

BOF = NDI + NPI + A + E

BOF - Balance of Financial Account?NDI - Net Direct Investment?NPI - Net Portfolio Investment?A - Asset Funding?E - Errors and Omissions?

Balance of Financial Account Example

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Here is how the Balance of Financial Account equation looks like with Values.

Here is how the Balance of Financial Account equation looks like with Units.

Here is how the Balance of Financial Account equation looks like.

140000 = 60000 + 35000 + 30000 + 15000

140000 = 60000 + 35000 + 30000 + 15000

140000 = 60000 + 35000 + 30000 + 15000

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Balance of Financial Account Solution

Follow our step by step solution on how to calculate Balance of Financial Account?

FIRST Step Consider the formula

BOF = NDI + NPI + A + E

Next Step Substitute values of Variables

∴

BOF = 60000 + 35000 + 30000 + 15000

Next Step Prepare to Evaluate

∴

BOF = 60000 + 35000 + 30000 + 15000

LAST Step Evaluate

∴

BOF = 140000

Balance of Financial Account Formula Elements

Variables

Balance of Financial Account

Balance of Financial Account is the difference between all money flowing into the country in a particular period of time (e.g., a quarter or a year) and the outflow of money to the rest of the world.

Symbol: BOF

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Balance of Financial Account

Net Direct Investment

Net Direct Investment is measures the net flow of capital resulting from the acquisition of lasting interest in enterprises between countries.

Symbol: NDI

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Net Direct Investment

Net Portfolio Investment

Net Portfolio Investment captures the net flow of capital between countries from purchases and sales of securities, excluding direct investment and reserve assets.

Symbol: NPI

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Net Portfolio Investment

Asset Funding

Asset Funding refers to the acquisition of financial assets, such as stocks, bonds, or other securities reflecting inflows of funds into the economy from abroad.

Symbol: A

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Asset Funding

Errors and Omissions

Errors and Omissions represent discrepancies that arise when recorded transactions do not balance due to data inaccuracies or unrecorded transactions.

Symbol: E

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Errors and Omissions

Other formulas in International Finance category

Go International Fisher Effect using Interest Rates

ΔE = (\frac{r d - r f}{1 + r f})

Go International Fischer Effect using Spot Rates

ΔE = (\frac{e o}{e t}) - 1

Go Covered Interest Rate Parity

F = (e o) \cdot (\frac{1 + r f}{1 + r d})

Go Current Account Balance

CAB = X - I + NY + NCT

How to Evaluate Balance of Financial Account?

Balance of Financial Account evaluator uses Balance of Financial Account = Net Direct Investment+Net Portfolio Investment+Asset Funding+Errors and Omissions to evaluate the Balance of Financial Account, The Balance of Financial Account is the sum of net direct investments, net portfolio investments, asset funding, and errors/omissions. Balance of Financial Account is denoted by BOF symbol.

How to evaluate Balance of Financial Account using this online evaluator? To use this online evaluator for Balance of Financial Account, enter Net Direct Investment (NDI), Net Portfolio Investment (NPI), Asset Funding (A) & Errors and Omissions (E) and hit the calculate button.

FAQs on Balance of Financial Account

What is the formula to find Balance of Financial Account?

The formula of Balance of Financial Account is expressed as Balance of Financial Account = Net Direct Investment+Net Portfolio Investment+Asset Funding+Errors and Omissions. Here is an example- 140000 = 60000+35000+30000+15000.

How to calculate Balance of Financial Account?

With Net Direct Investment (NDI), Net Portfolio Investment (NPI), Asset Funding (A) & Errors and Omissions (E) we can find Balance of Financial Account using the formula - Balance of Financial Account = Net Direct Investment+Net Portfolio Investment+Asset Funding+Errors and Omissions.

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Balance of Financial Account Formula

Balance of Financial Account Example

Balance of Financial Account Solution

Balance of Financial Account Formula Elements

Other formulas in International Finance category

How to Evaluate Balance of Financial Account?

FAQs on Balance of Financial Account

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