Why Are International Investors Who Have Invested in Developing Nations

question 200

Multiple Choice

Why are international investors who have invested in developing nations favoring foreign direct investment and portfolio investment over loans?

• A) The process of making loans is usually more difficult for investors to do than foreign direct and portfolio investment.
• B) The interest rate charged on the loans is usually lower than what can be earned in the U.S.
• C) It is illegal for banks to make loans to foreign firms.
• D) Investors have an aversion to owning dead capital and want to make sure that the resources they own do not become dead capital.

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