Suppose that an American opens and operates a candy factory in Finland.This is an example of
A)foreign direct investment.American saving is used to finance Finish investment.
B)foreign direct investment.American saving is used to finance American investment.
C)foreign portfolio investment.American saving is used to finance Finish investment.
D)foreign portfolio investment.American saving is used to finance American investment.

Question

Quizplus · Accepted Answer

This is an example of foreign direct investment because an American is making a direct investment in a candy factory in Finland by opening and operating it. Furthermore, the American's savings are being used to finance the investment in Finland. This is different from foreign portfolio investment, where an individual or entity invests in foreign stocks, bonds, or other securities without direct involvement in the management or operation of the company.

Suppose That an American Opens and Operates a Candy Factory