A Fast-Growing Form of Foreign Direct Investment Is Sovereign Wealth

question 234

Multiple Choice

A fast-growing form of foreign direct investment is sovereign wealth funds (SWFs) . Why do these investments by governments with surplus cash flows worry trade experts?

• A)SWFs invest in high risk start-ups with no proven history of producing goods and services that developing or developed countries need. They may likely undermine the years of development of growing economies.
• B)SWFs have a greater risk of going bankrupt than other investments because governments are not good at running businesses.
• C)Some fear that governments investing their SWFs in large firms may gain control of natural resources, sensitive technologies, and the decision making of management.
• D)Some trading experts believe that SWFs are supported by terrorist organizations, and their strategy is an indirect way to undermine the

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Definitions:

Tort Law

A body of law that addresses and provides remedies for civil wrongs not arising out of contractual obligations.

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Sanctions imposed by a court for violations of criminal laws, which can include fines, imprisonment, or other forms of punishment.

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The act of taking adverse action against someone as a response to a complaint or misconduct reporting, particularly in the workplace.

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A false statement made by one person about another, which harms the reputation of the person the statement is about.