Final answer:
Direct Foreign Investment offers the most control and highest potential return, involving a long-term focus and significant managerial responsibility in a foreign company. The correct option is E.
Step-by-step explanation:
The mode of foreign market entry that offers the most control and highest potential return for a company is Direct Foreign Investment (FDI). When a company engages in FDI, it purchases more than ten percent of a company in a foreign country and typically assumes some managerial responsibility.
This involvement allows the investing company to exert significant control over its operations abroad. Moreover, FDI is characterized by a long-term focus, in contrast to portfolio investments which can be liquidated much more rapidly.
For instance, a large transaction such as the purchase of a company that manufactures automobile parts in the United Kingdom would take weeks to months to plan and execute, whereas portfolio investments like government bonds can be bought or sold with just a few keystrokes or a phone call. The correct option is E.