If an American-based firm opens and operates a new clothing factory in Honduras, then it is engaging in
A)foreign portfolio investment.
B)foreign financial investment.
C)foreign direct investment.
D)indirect foreign investment.

Question

Quizplus · Accepted Answer

When an American-based firm opens and operates a new clothing factory in Honduras, it is engaging in foreign direct investment (FDI). This is because FDI involves a company directly investing in facilities to produce or market a product in a foreign country, which is exactly what is described.

If an American-Based Firm Opens and Operates a New Clothing