In a direct foreign investment,which of the following statements is true of direct investors?
A)They do not have controlling interest of a firm in direct foreign investment.
B)They possess the lowest potential risk.
C)They have the highest potential reward.
D)They have low minority interest in the foreign firm.

Question

In a direct foreign investment,which of the following statements is true of direct investors?
A)​They do not have controlling interest of a firm in direct foreign investment.
B)They possess the lowest potential risk.
C)They have the highest potential reward.
D)​They have low minority interest in the foreign firm.

Quizplus · Accepted Answer

Direct investors have the highest potential reward in direct foreign investment as they have controlling interest in the foreign firm and can benefit from its profits and growth. Option A is incorrect as direct investors do have controlling interest. Option B is incorrect as direct investment carries higher potential risk as it involves significant financial investment and exposure to foreign market conditions. Option D is also incorrect as direct investors have high majority interest in the foreign firm.

In a Direct Foreign Investment,which of the Following Statements Is