The Free Market View on Foreign Direct Investment (FDI)

question 39

Multiple Choice

The free market view on foreign direct investment (FDI) :

• A) leads to a win-win situation for both home and host countries.
• B) considers FDI as an instrument of imperialism.
• C) approves FDI only when its benefits outweigh its costs.
• D) states that FDI enables countries to tap into their absolute advantages when unrestricted by government intervention.

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Definitions:

Holding-Period Return

Holding-period return is the total return received from holding an asset or portfolio of assets over a specified period, including interest, dividends, and capital gains.

Dividend

A portion of a company's earnings that is distributed to shareholders, usually in the form of cash or additional shares.

Effective Annual Rate

The actual interest rate an investor receives or pays in a year, taking into account the effect of compounding.

Quarterly Return

The financial return or profit generated by an investment over a three-month period.