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Question : Which of the following is not a type of foreign direct investment?

Option 1: Joint venture

Option 2: Mergers and acquisitions

Option 3: Portfolio investment

Option 4: Greenfield investment


Team Careers360 1st Jan, 2024
Answer (1)
Team Careers360 21st Jan, 2024

Correct Answer: Portfolio investment


Solution : The correct answer is (c) Portfolio investment

Portfolio investment is not a type of foreign direct investment (FDI). Portfolio investment refers to the investment in financial assets such as stocks, bonds, and other securities, with the primary objective of earning a return on investment. In portfolio investment, the investor does not seek to gain significant control or management influence over the invested company or business.

On the other hand, foreign direct investment (FDI) involves the establishment or acquisition of a lasting interest in an enterprise located in a foreign country. It implies a higher degree of control, management influence, and long-term involvement in the invested entity.

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