Question

Indicate whether each of the following actions represents foreign direct investment or foreign portfolio investment. Foreign Direct Investment Foreign Portfolio Investment Buying a corporate bond in a foreign country Opening up a factory in a foreign country Which of the following is more likely to engage in foreign direct investment?A. A corporation B. An individual investor

Answer 1

Answer: See explanation

Explanation:

A foreign direct investment is simply referred to as an investment that is made by an economic entity in one country into a particular business that is been situated in another country.

A foreign portfolio investment has to do with the holding of financial assets like bonds, stocks, and cash equivalents in another country.

Based on the.abive explanation,

Buying a corporate bond in a foreign country - This is a foreign portfolio investment

Opening up a factory in a foreign country - This is a foreign direct investment.

It should also be noted that a corporation is more likely to engage in foreign direct investment while the individual can engage in the foreign portfolio investment.