Question

Foreign Direct Investment means:________a. buying or creating facilities in another country for producing in local markets. b. buying or creating facilities in home country. c. buying facilities based in home country for the purpose of exporting products. d. buying facilities in home country for the sole purpose of importing essential goods.

Answer 1

a. buying or creating facilities in another country for producing in local markets.

Step-by-step explanation:

Foreign direct investments refer to establishments or acquisition of a business in a foreign country. The individual or firm involved in foreign direct investment is a citizen of a local country but starts a business in a different country.

Foreign direct investments are different from portfolio investments. In Portfolio investment, the investor buys securities in a foreign market, but foreign direct investment involves setting up a business or purchasing one in another country.