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QUESTION 23 Which of the following represents direct foreign investment? parent companies sending equipment to subsidiaries...

QUESTION 23 Which of the following represents direct foreign investment?

parent companies sending equipment to subsidiaries

purchase of a tract of land

bonds and other financial assets

subsidiaries remitting funds to parent companies

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Answer #1

Option B is correct: purchase of a tract of land

The purchase of a tract of land represents direct foreign investment. The company is buying a piece of land in the foreign country.

Option A is incorrect because parent companies sending equipment to subsidiaries represents investment in capital assets

Option C is incorrect because investing in bonds and other financial assets represents indirect investments as they are paper assets

Option D is incorrect because subsidiaries remitting funds to parent companies is not an investment at all. It is just a repatriation of funds

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