Question 20 of 29
Q.Which of the following is not an example of Foreign Direct Investment ?
(a) the purchase of bonds or stock issued by a textile company overseas.
(b) the construction of a new auto assembly plant overseas.
(c) the creation of a wholly owned business firm overseas.
(d) the acquisition of an existing steel mill overseas.
Puducherry TnboardTamil Nadu HSC (DGE) Commerce Board 2023MCQ· 1mImportance★★★★★
69% · 20/29 Questions
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Start your 14-day free trial to unlock the full solution →Buying bonds or stock overseas is portfolio investment, not FDI, so option (a) is the correct 'not FDI' answer.
In the international-economics topic of the Tamil Nadu HSC Commerce syllabus, foreign investment (recorded in the capital account of the balance of payments) is of two kinds:
- Foreign Direct Investment (FDI): investment that gives a lasting interest and management control in a foreign enterprise — e.g., building a new plant, setting up a wholly owned firm, or acquiring an existing company abroad.
- Foreign Portfolio Investment (FPI): buying financial assets such as shares and bonds purely for returns, without acquiring control. …
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