Direct Foreign Investment and Foreign Portfolio Investment Both Can Be

question 91

True/False

Direct foreign investment and foreign portfolio investment both can be beneficial to an FI because of imperfectly correlated returns with domestic investments.

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Definitions:

Stock Dividend

Payment made by a firm to its owners in the form of stock, diluting the value of each share outstanding.

Cash Discounts

An incentive offered by sellers to buyers for early payment of invoices, aimed at encouraging prompt payment and improving cash flow.

Short-term Financial Policy

Pertains to strategies and decisions related to managing a company’s current assets and liabilities to ensure liquidity.

Flexible Short-term Policy

A financial strategy that allows for maintaining a higher level of current assets, providing a buffer against unforeseen liabilities or expenses.