Distinguish between the following: (iii) Foreign Direct Investment and Foreign Institutional Investment.

CS Executive · Capital Markets & Securities Laws · PYQS · June 2017
Distinguish between the following: (iii) Foreign Direct Investment and Foreign Institutional Investment.

Answer & Explanation:

(iii) Foreign Direct Investment and Foreign Institutional Investment Foreign Direct Investment Foreign Institutional Investment It is a direct investment into the production or business by a company in a country other than its domestic country. It is an investment made by an investor in the markets of a foreign nation. Foreign Direct Investment cannot enter and exit easily. Foreign Institutional Investment can enter the stock market easily. Foreign Direct Investment targets a specific enterprise. The Foreign Institutional Investment increases capital availability in general. The Foreign Direct Investment is considered to be more stable than Foreign Institutional Investment. The Foreign Institutional Investment is considered to be less stable than Foreign Direct Investment. The Foreign Direct Investment is Strategic investment. The Foreign Institutional Investment is Portfolio investment.

Topics: Foreign Investments

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