Foreign Direct Investment (FDI) Refers To

question 42

Multiple Choice

Foreign Direct Investment (FDI) refers to:

• A)the flow of funding provided by an investor or lender to establish or acquire a foreign company or to expand or finance an existing foreign company that the investor owns and controls.
• B)the hot money that an investor needs to get registered in a foreign stock exchange to make investments, and have the liberty to sell and take back the stocks purchased earlier.
• C)a method of funding business adopted by a foreign investor by participating directly in the secondary markets of a country, through investments in the country's stocks or bonds.
• D)the passive holding of securities such as foreign stocks, bonds, or other financial assets, none of which entails active management or control of the securities issued by the investor.

Differentiate between public and private sector contributions to productivity through research and development.

Learn how on-the-job experience enhances labor productivity through improvement in human capital.

Understand the concept and critical views regarding basic research and its role in economic growth.

Understand the factors contributing to productivity growth and their impact on the U.S. economy.

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Definitions:

Risk Adjusted Discount Rate

A rate used in capital budgeting that adjusts for the risk of cash flows, providing a way to account for the riskiness of the project.

NPV

Net Present Value (NPV) is a financial metric used to assess the profitability of an investment, calculating the difference between the present value of cash inflows and outflows over a period of time.

IRR

The Internal Rate of Return is a financial measurement employed to gauge the potential profit of investments.

Flexibility Option

An investment option that provides the holder with the ability to respond to changes in the financial market or business environment.