The difference between Foreign Direct Investment and Portfolio Investment is that
A)Portfolio Investment mostly represents the sale and purchase of foreign financial assets such as stocks and bonds that do not involve a transfer of control.
B)Foreign Direct Investment mostly represents the sale and purchase of foreign financial assets such as stocks whereas Portfolio Investment mostly involves the sales and purchase of foreign bonds.
C)Foreign Direct Investment is about buying land and building factories, whereas portfolio investment is about buying stocks and bonds.
D)All of the above

Question

Quizplus · Accepted Answer

Foreign Direct Investment involves the establishment of a new enterprise or the expansion of an existing enterprise by a foreign investor, which involves the transfer of control, while Portfolio Investment involves the sale and purchase of foreign financial assets such as stocks and bonds that do not involve a transfer of control. Therefore, option A is the correct answer. Option B is incorrect because both Foreign Direct Investment and Portfolio Investment involve the purchase and sale of foreign stocks and bonds. Option C is partially correct because Foreign Direct Investment may involve buying land and building factories, but it also includes acquiring an existing enterprise.

The Difference Between Foreign Direct Investment and Portfolio Investment Is