Which investment occurs when a firm invests directly in projection or other facilities in a foreign country over which they have effective control?
A) foreign direct investment (FDI)
B) foreign portfolio investment (FPI)
C) domestic indirect investment
D) none of the above

Question

Quizplus · Accepted Answer

This type of investment is called foreign direct investment (FDI), where the firm invests directly in facilities or projects in a foreign country and has effective control over them. Option B is incorrect as foreign portfolio investment (FPI) involves investing in financial assets such as stocks and bonds of a foreign country. Option C is not a valid term. Therefore, the correct answer is option A - foreign direct investment (FDI).

Which Investment Occurs When a Firm Invests Directly in Projection