Which of the Following Is True About Foreign Direct Investment

question 29

Multiple Choice

Which of the following is true about foreign direct investment?

• A) It is a means of reducing transportation costs in export sales.
• B) Since the 1980s, foreign direct investment has been relatively stable worldwide.
• C) Only very large corporations are undertaking foreign direct investment.
• D) It refers only to the amount of money U.S. corporations put into non-U.S. businesses.

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Definitions:

Dividends

A repeat - Financial distributions made by companies to their shareholders, typically from the firm's earnings.

Spot Exchange Rate

The current market price for exchanging one currency for another for immediate delivery.

Forward Exchange Rate

A predetermined price at which a currency transaction will occur at a future date.

Mexican Treasury

Refers to the governmental department responsible for issuing Mexican government securities, including bonds and treasury bills.