What Is a Portfolio Investment? How Does It Differ from Foreign

question 51

Essay

What is a portfolio investment? How does it differ from foreign direct investment?

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Definitions:

Economies of Scale

Businesses gain financial benefits from their size of operation, as the cost for each unit of output typically reduces with the expansion of scale.

Economies of Scope

Cost advantages that enterprises obtain due to the efficient management of diverse business activities that enable them to share resources and capabilities across different products or segments.

Product Transformation Curve

Another term for the "production possibility frontier," which shows the different quantities of two goods that can be produced with a given set of resources.

Economies of Scope

Cost advantages that enterprises obtain due to efficiency improvements gained by producing a wider variety of goods or services.