Poor Countries Often Have a Difficult Time Attracting Foreign Direct

question 8

Multiple Choice

Poor countries often have a difficult time attracting foreign direct investment funds because

• A) wages are low in poor countries.
• B) investment risks are quite low in poor countries so rates of return are low.
• C) property rights are not protected so investors fear their property may be confiscated.
• D) All of the above are correct.

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Definitions:

Real Rate Of Return

The rate of return on an investment after adjusting for inflation, representing the actual purchasing power gained.

Semi-Annually

Occurring twice a year; a term often used in the context of paying interest or dividends.

Yield To Maturity

The total return anticipated on a bond if it is held until its maturity date, considering all interest payments and the principal repayment.

Par

The face value of a bond or other security, at which it can be redeemed at maturity or the amount of money equal in value to a particular share or bond.