What's the Difference Between 'Foreign Direct Investment' and 'Foreign Portfolio

question 2

Multiple Choice

What's the difference between 'foreign direct investment' and 'foreign portfolio investment'?

• A)Foreign direct investment involves purchases of foreign shares or bonds by individuals or firms, while foreign portfolio investment involves a firm purchasing or building a facility in a foreign country.
• B)Individuals or firms engage in foreign portfolio investment, but only firms can engage in foreign direct investment.
• C)Foreign direct investment only takes place when governments make official purchases or foreign investments, while foreign portfolio investment takes place when firms, individuals or the government purchase foreign investments.
• D)Foreign direct investment can give a low-income country access to funds and technology it would not otherwise have, but foreign portfolio investment does not expand that access.

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Definitions:

Determination

The firmness of purpose or the process of establishing something exactly, often through research or calculation.

Persistence

Persistence is the continued effort and determination in doing something despite difficulties or delays in achieving success.

Motivation

The drive or desire that initiates, guides, and maintains goal-oriented behaviors.

Activation

Refers to the process of stimulating something to act or function.