An example of foreign direct investment is when an Italian company:
A)purchases 1 000 shares of stock issued by an American company.
B)opens a new Italian factory.
C)purchases shares issued in Italy.
D)opens a new factory in Australia.

Question

Quizplus · Accepted Answer

Foreign direct investment involves when a company from one country establishes a physical presence in another country. In this case, the Italian company opening a new factory in Australia would be considered foreign direct investment. Choices A, B, and C do not involve establishing a physical presence in another country.

An Example of Foreign Direct Investment Is When an Italian