The Difference Between Foreign Direct Investment and Portfolio Investment Is

question 5

Multiple Choice

The difference between Foreign Direct Investment and Portfolio Investment is that

• A)Portfolio Investment mostly represents the sale and purchase of foreign financial assets such as stocks and bonds that do not involve a transfer of control.
• B)Foreign Direct Investment mostly represents the sale and purchase of foreign financial assets such as stocks whereas Portfolio Investment mostly involves the sales and purchase of foreign bonds.
• C)Foreign Direct Investment is about buying land and building factories, whereas portfolio investment is about buying stocks and bonds.
• D)All of the above

Grasp the concepts of bond interest payments and how to journalize these transactions properly.

Comprehend the amortization of bond discount and premium using straight-line and effective interest rate methods.

Identify and explain the terms and characteristics of different types of bonds, such as callable, convertible, and term bonds.

Understand the redemption of bonds before maturity and the associated accounting entries.

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Definitions:

Production Costs

The total expenses incurred in the manufacturing or creation of a product or service.

Economic Profit

The difference between total revenue and total costs, including both explicit and opportunity costs, indicating true profitability.

Explicit Costs

Direct payments made to others in the course of running a business, such as wage, rent, and materials.

Production Costs

The total expense incurred in manufacturing a product or providing a service, including raw materials, labor, and overhead costs.