An investment in which of the following represents an direct foreign investment?
I.Global mutual fund
II.U.S.multinational firm
III.ADR
IV.Foreign security

Question

Quizplus · Accepted Answer

A direct foreign investment involves investing in a foreign company or setting up a new business in a foreign country. Therefore, a U.S. multinational firm, which operates in multiple countries, represents a direct foreign investment. Similarly, a foreign security, which is a security issued by a foreign company or government, also represents a direct foreign investment. A global mutual fund and an ADR (American Depositary Receipt) do not represent direct foreign investments as they invest in foreign companies indirectly through the purchase of securities.

An Investment in Which of the Following Represents an Direct