Question

The difference between foreign direct investment and portfolio investment is that?

1) Foreign direct investment involves the acquisition of a controlling interest in a foreign company, while portfolio investment involves the purchase of securities in foreign companies.
2) Foreign direct investment is a long-term investment strategy, while portfolio investment is a short-term investment strategy.
3) Foreign direct investment is typically made by multinational corporations, while portfolio investment is typically made by individual investors or institutional investors.
4) Foreign direct investment is subject to more government regulations and restrictions, while portfolio investment is relatively more flexible.

Answer 1

Foreign direct investment involves acquiring a controlling interest in a foreign company, while portfolio investment involves purchasing securities in foreign companies. Foreign direct investment is usually made by multinational corporations and is subject to more government regulations, while portfolio investment is typically made by individual or institutional investors and is more flexible.

Step-by-step explanation:

The difference between foreign direct investment and portfolio investment is that foreign direct investment involves the acquisition of a controlling interest in a foreign company, while portfolio investment involves the purchase of securities in foreign companies. Foreign direct investment is typically made by multinational corporations, while portfolio investment is typically made by individual investors or institutional investors. Additionally, foreign direct investment is subject to more government regulations and restrictions, while portfolio investment is relatively more flexible.