Question

Which of the following statements is INCORRECT?

A. Voting rights are not the only way a foreign owner can exert its influence over foreign business operations.

B. While foreign direct investment is often conducted by large multinational enterprises, the majority of FDI flows in the world is done by small and medium enterprises.

C. Foreign direct investment and portfolio investment both involve investments in equity ownership.

D. Foreign direct investment is the defining line between a multinational enterprise and a domestic firm.

Answer 1

B.) While FDI is often conducted by large multi national enterprises, the majority of FDI flows in the world is done by small and medium enterprises

portfolio investment is purchasing securities of foreign countries, such as stock and bonds, on an exchange. Direct investment is seen as a long-term investment in the country's economy, while portfolio investment can be viewed as a short-term move to make money.A foreign direct investment (FDI) is an investment in the form of a controlling ownership in a business in one country by an entity based in another country. It is thus distinguished from a foreign portfolio investment by a notion of direct control.

Foreign investments have priority in every process and participate in every operations.