Which of the following is an example of U.S.foreign portfolio investment?
A)Albert,a German citizen,buys stock in a U.S.computer company.
B)Larry,a citizen of Ireland,opens a fish and chips restaurant in the United States.
C)Nancy,a U.S.citizen,buys bonds issued by a Japanese bank.
D)Dustin,a U.S.citizen,opens a country-western tavern in New Zealand.

Question

Quizplus · Accepted Answer

Foreign portfolio investment refers to the purchase of stocks, bonds, and other financial assets by foreign investors in a country. Option A is an example of a foreign direct investment where a foreign citizen buys stock in a U.S. company. Option B is an example of a foreign direct investment where a citizen from Ireland establishes a business in the United States. Option D is also an example of a foreign direct investment where a U.S. citizen establishes a business in New Zealand. Only option C involves a U.S. citizen buying bonds issued by a Japanese bank, which constitutes foreign portfolio investment.

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