Economics · Economy
Which of the following statements best highlights a primary distinction between Foreign Portfolio/Institutional Investment (FII) and Foreign Direct Investment (FDI)?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1FII is considered a more stable and long-term source of foreign capital than FDI.
- 2FDI operates only in secondary capital markets, whereas FII invests directly in primary markets.
- 3FII brings managerial expertise and technology, whereas FDI brings only passive financial capital.
- 4FII helps increase overall capital availability in financial markets, whereas FDI targets specific physical enterprises or sectors.✓
Correct answer
FII helps increase overall capital availability in financial markets, whereas FDI targets specific physical enterprises or sectors.
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