Suppose that new petroleum reserves are discovered in a country and oil extraction is expected to generate a substantial revenue stream for the government. The government wants to leave some of the accumulated wealth to future generations in the form of a diversified portfolio that is not strongly affected by oil price fluctuations.
Which one of the following strategies for using oil revenues would help achieve that goal?
A) Building a sovereign wealth fund that invests in international equity and bonds
B) Investing the revenues in equity shares of domestic oil companies
C) Relocating resources from other industries to the oil industry
D) Investing oil revenues into the domestic infrastructure
