Foreign Direct Investment differs from Foreign Portfolio Investment mainly because FDI
- A.is made only by governments
- B.gives the investor a lasting interest and a say in management
- C.is routed through the current account of the balance of payments
- D.can be withdrawn on any trading day
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Foreign direct investment is made to acquire a lasting interest in an enterprise abroad, conventionally measured as ten per cent or more of the voting power, and with it comes a say in how the company is run; portfolio investment buys shares and bonds without any such control.
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