Correct Answer: Foreign investment in domestic real estate

Solution : The correct answer is (c) Foreign investment in domestic real estate.

A capital account transaction in the Balance of Payments refers to activities that involve changes in a country's foreign assets and liabilities. It includes capital transfers and the acquisition and disposal of non-produced, non-financial assets.

Foreign investment in domestic real estate: This is an example of a capital account transaction. When foreign entities invest in domestic real estate, it involves a change in a country's non-produced, non-financial assets and is recorded in the capital account.