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Which of the following are the differences between Foreign Direct Investment and Foreign Portfolio Investment?
- a)FDI is a long-term investment whereas FPI is a short term
- b)Liquidity is high in FDI whereas low in FPI
- c)Selling of FDI is difficult whereas Selling is easy in FPI
- d)Risks are stable in FDI whereas it's Volatile in FPI
- e)All the above
Correct answer is option 'E'. Can you explain this answer?
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Which of the following are the differences between Foreign Direct Inve...
Differences between Foreign Direct Investment (FDI) and Foreign Portfolio Investment (FPI)
a) FDI is a long-term investment whereas FPI is a short term
Foreign Direct Investment (FDI) involves a long-term commitment as it entails establishing operations or acquiring a significant stake in a foreign company. On the other hand, Foreign Portfolio Investment (FPI) involves investing in financial assets such as stocks and bonds with the intention of earning a return in the short term.
b) Liquidity is high in FDI whereas low in FPI
FDI typically involves investments in physical assets like factories or infrastructure, which are less liquid compared to financial assets like stocks and bonds. FPI, on the other hand, involves investments in easily tradable securities, making it more liquid.
c) Selling of FDI is difficult whereas Selling is easy in FPI
Selling off a Foreign Direct Investment (FDI) can be a complex and time-consuming process due to the nature of the assets involved. In contrast, selling Foreign Portfolio Investment (FPI) assets like stocks and bonds can be done quickly and easily on the financial markets.
d) Risks are stable in FDI whereas it's Volatile in FPI
Foreign Direct Investment (FDI) tends to be more stable in terms of risks as it involves a long-term commitment and ownership of physical assets. Foreign Portfolio Investment (FPI), on the other hand, is subject to market volatility and fluctuations in asset prices, leading to higher risk levels.
Therefore, all the above options are correct in highlighting the key differences between Foreign Direct Investment (FDI) and Foreign Portfolio Investment (FPI).
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Which of the following are the differences between Foreign Direct Investment and Foreign Portfolio Investment?a)FDI is a long-term investment whereas FPI is a short termb)Liquidity is high in FDI whereas low in FPIc)Selling of FDI is difficult whereas Selling is easy in FPId)Risks are stable in FDI whereas its Volatile in FPIe)All the aboveCorrect answer is option 'E'. Can you explain this answer?
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Which of the following are the differences between Foreign Direct Investment and Foreign Portfolio Investment?a)FDI is a long-term investment whereas FPI is a short termb)Liquidity is high in FDI whereas low in FPIc)Selling of FDI is difficult whereas Selling is easy in FPId)Risks are stable in FDI whereas its Volatile in FPIe)All the aboveCorrect answer is option 'E'. Can you explain this answer? for Banking Exams 2025 is part of Banking Exams preparation. The Question and answers have been prepared according to the Banking Exams exam syllabus. Information about Which of the following are the differences between Foreign Direct Investment and Foreign Portfolio Investment?a)FDI is a long-term investment whereas FPI is a short termb)Liquidity is high in FDI whereas low in FPIc)Selling of FDI is difficult whereas Selling is easy in FPId)Risks are stable in FDI whereas its Volatile in FPIe)All the aboveCorrect answer is option 'E'. Can you explain this answer? covers all topics & solutions for Banking Exams 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Which of the following are the differences between Foreign Direct Investment and Foreign Portfolio Investment?a)FDI is a long-term investment whereas FPI is a short termb)Liquidity is high in FDI whereas low in FPIc)Selling of FDI is difficult whereas Selling is easy in FPId)Risks are stable in FDI whereas its Volatile in FPIe)All the aboveCorrect answer is option 'E'. Can you explain this answer?.
Which of the following are the differences between Foreign Direct Investment and Foreign Portfolio Investment?a)FDI is a long-term investment whereas FPI is a short termb)Liquidity is high in FDI whereas low in FPIc)Selling of FDI is difficult whereas Selling is easy in FPId)Risks are stable in FDI whereas its Volatile in FPIe)All the aboveCorrect answer is option 'E'. Can you explain this answer? for Banking Exams 2025 is part of Banking Exams preparation. The Question and answers have been prepared according to the Banking Exams exam syllabus. Information about Which of the following are the differences between Foreign Direct Investment and Foreign Portfolio Investment?a)FDI is a long-term investment whereas FPI is a short termb)Liquidity is high in FDI whereas low in FPIc)Selling of FDI is difficult whereas Selling is easy in FPId)Risks are stable in FDI whereas its Volatile in FPIe)All the aboveCorrect answer is option 'E'. Can you explain this answer? covers all topics & solutions for Banking Exams 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Which of the following are the differences between Foreign Direct Investment and Foreign Portfolio Investment?a)FDI is a long-term investment whereas FPI is a short termb)Liquidity is high in FDI whereas low in FPIc)Selling of FDI is difficult whereas Selling is easy in FPId)Risks are stable in FDI whereas its Volatile in FPIe)All the aboveCorrect answer is option 'E'. Can you explain this answer?.
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