A foreign direct investment occurs when ________.
A)a company owns at least 25% of a foreign firm
B)a company has a controlling interest in a foreign company
C)foreign ownership is in private rather than government securities
D)a foreign firm agrees to a licensing agreement with a large conglomerate

Question

Quizplus · Accepted Answer

A foreign direct investment occurs when a company has a controlling interest in a foreign company. This means that the company has a significant level of ownership and control over the foreign company's operations and decision-making processes. Owning at least 25% of a foreign firm (option A) may indicate a level of influence, but it does not necessarily mean that the company has a controlling interest. Option C refers to the type of securities being purchased and does not relate to ownership levels. Option D describes a licensing agreement, which is a different type of business arrangement that does not involve ownership.

A Foreign Direct Investment Occurs When ________