Balance of payments identity calculates net financial asset transactions Steps:

• Sum current account components: trade in goods (-50) + interest, transfers (secondary income) (-10) = -60 billion deficit.
• Add capital account: current transfers in financial assets (-10) = total deficit of -70 billion (net borrowing of 70 billion).
• Net portfolio investment (40 billion) represents net incurrence of portfolio liabilities (capital inflow, assuming no portfolio asset change).
• Net transactions in financial assets (acquisition) = net liabilities (40) - net borrowing (70) = -30 billion.

Why B is correct:

• Balance of payments identity requires net borrowing = net liabilities - net financial assets; with liabilities at 40 billion, assets adjust to -30 billion to balance the 70 billion deficit.

Why the others are wrong:

• A ignores the 70 billion deficit, mistaking portfolio inflow sign.
• C omits one transfer component (-10), understating adjustment.
• D matches only the capital transfers, excluding full deficit financing.

Final answer: B