Consider the Following: a Foreign Automobile Company Builds a Manufacturing

question 35

Multiple Choice

Consider the following: A foreign automobile company builds a manufacturing plant in Tennessee and European investors buy U.S. Treasury Bonds.

• A) Both activities would be considered direct investment.
• B) Both activities would be considered portfolio investment.
• C) The auto manufacturer in engaging in portfolio investment, and the European investors are engaged in direct investing.
• D) The auto manufacturer in engaging in direct investment, and the European investors are engaged in portfolio investing.

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Definitions:

Criminal Act

An action or omission that constitutes an offense that may be prosecuted by the state and is punishable by law.

Biological Father

The male parent who has contributed the genetic material to a child.

Born out of Wedlock

Refers to a child born to parents who are not legally married to each other at the time of the child's birth.

Snob Effect

The phenomenon where the demand for a certain good increases as it becomes more exclusive or prestigious, independent of its price.