When Nestlé,a Swiss firm,bought the American firm Carnation,it was engaged in foreign direct investment.If Nestlé had only bought a non-controlling number of shares of the firm,
A)Nestlé would have been engaged in portfolio investment.
B)Nestlé would have been engaged in a cross-border acquisition.
C)it would depend if they bought the shares from an American or a Canadian.
D)none of the options

Question

Quizplus · Accepted Answer

If Nestlé had only bought a non-controlling number of shares of the firm, it would have been engaged in portfolio investment. Foreign direct investment involves acquiring a controlling stake or establishing new operations in a foreign country, whereas portfolio investment involves buying securities of foreign companies without acquiring control.

When Nestlé,a Swiss Firm,bought the American Firm Carnation,it Was Engaged