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In the attached diagram, VMPK A and VMPK are displayed for two countries A and B with domestic available capital for investment of O' to

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In the attached diagram, VMPK A and VMPK are displayed for two countries A and B with domestic available capital for investment of O' to K1' for country A and O to K1" for country B. Given these domestic capital availabilities and their respective VMPK's, and assuming capital resources are allowed to move freely between countries. Once the international capital market reaches its equilibrium and hence optimal capital allocation is reached, how much of the capital the Source country will invest within its own domestic economy and how much capital it will transfer to the Host country as foreign investment? VMPK! VMPK Country Country A o VMPT VMPX" - Total Capital Resource of Country A and Country B Combined OJa. Capital OK2' to stay within the source country and capital O'K1" to be transferred to Host country O b. Capital OK2" to stay within the source country and capital K2"K1" to be transferred to Host country c. Capital OK1' to stay within the source country and capital O'K1" to be transferred to Host country O d. Capital OK1" to stay within the source country and capital O'K2" to be transferred to Host country

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