Asked by Elizabeth Carney on May 14, 2024
Verified
Direct investment is:
A) building significant facilities in another country in order to do business there or in nearby countries.
B) purchasing the stocks of foreign companies directly from those companies.
C) setting up sales offices in foreign countries.
D) exporting product to other countries.
Significant Facilities
Important physical buildings, plants, or other structures owned or used by a business to carry out its operations.
Direct Investment
In international business, building facilities in another country.
- Analyze the benefits and risks of direct investment in international markets.
Verified Answer
SL
Shannon LamarMay 18, 2024
Final Answer :
A
Explanation :
Direct investment involves building significant facilities in another country, such as factories or offices, in order to do business there or in nearby countries. This is different from other methods such as setting up sales offices or exporting products, as it involves a more significant investment and commitment to the foreign market. Purchasing stocks directly from foreign companies is also a type of investment, but it is not considered direct investment as it does not involve building physical infrastructure.
Learning Objectives
- Analyze the benefits and risks of direct investment in international markets.
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