Foreign Direct Investment (FDI) is defined as
A) Significant investment by a foreign entity
B) Direct purchases of stocks and/or bonds by foreigners
C) Any investment undertaken by a multinational Enterprise (MNE)
D) Government to Government Loans
E) A Foreign firm taking a controlling interest in local firm

Question

Quizplus · Accepted Answer

Foreign Direct Investment (FDI) refers to a foreign firm taking a controlling interest in a local firm, usually with the aim of conducting business operations in the local market. Other options such as significant investment by a foreign entity or any investment undertaken by a multinational Enterprise (MNE) may also be associated with FDI, but they do not capture the controlling interest aspect that distinguishes FDI. Direct purchases of stocks and/or bonds by foreigners and government to government loans are not FDI as they do not involve ownership or control of business operations.

Foreign Direct Investment (FDI) Is Defined as