A Key Benefit of Foreign Direct Investment to Poorer Countries

question 31

Multiple Choice

A key benefit of foreign direct investment to poorer countries is

• A) they gain all the returns on such investment.
• B) that such investment is very reliable.
• C) they avoid the need to have their own stock market.
• D) they gain state-of-the-art technological knowledge.

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Definitions:

Transitory Components

Elements affecting financial statements or economic conditions that are expected to be temporary and not indicative of ongoing future performance.

Value-Irrelevant

Financial information or factors that do not impact an investor's or decision maker's assessment of a company's value.

Reported Earnings

The net income that a company reports to its investors and shareholders, often found on its income statement.

Abnormal Earnings

Profits that exceed or fall short of the expected normal return for a given year or period.