If a Dutch pension fund purchases 1,000 shares of Sony's stock, the Dutch company has most likely ________.

Question

Quizplus · Accepted Answer

When a Dutch pension fund purchases shares of Sony's stock, it is making a foreign portfolio investment. This is because it is investing in securities of a foreign company without seeking control over the company. Foreign direct investment (FDI), on the other hand, involves obtaining a lasting interest and a degree of influence in the management of a foreign firm, which is not the case here. The purchase does not directly relate to earning a higher or lower return on assets or rate of return without additional context.

If a Dutch Pension Fund Purchases 1,000 Shares of Sony's