If your Canadian-based firm opens and operates a new watch factory in Panama, what type of investment is your firm engaging in?
A)foreign portfolio investment
B)foreign financial investment
C)foreign direct investment
D)foreign capital investment

Question

Quizplus · Accepted Answer

Foreign direct investment (FDI) occurs when a firm invests in and manages operations in a foreign country. In this scenario, the Canadian-based firm is opening and operating a new watch factory in Panama, therefore it is engaging in FDI. Foreign portfolio investment and foreign financial investment refer to passive investments in financial assets, while foreign capital investment is a broad term that can include various types of foreign investments.

If Your Canadian-Based Firm Opens and Operates a New Watch