Consider the following regarding FDI 1 FDI is when one individual or business owns 10...........

Economic Affairs Foreign Investment

Consider the following regarding FDI.

1) FDI is when one individual or business owns 10% or more of a foreign company's capital.

2) Free trade agreements discourage foreign direct investment.

3) Favouring FDI over FII can offset the volatility created by hot money.

Select the correct statement/s using codes given below.

1 and 2

2 and 3

1 and 3

All of the above

If the ownership is less than 10% it qualifies as FII and 10% or more qualifies as FDI.

2nd statement is incorrect because free trade agreements encourage foreign direct investment.

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