Consider the following statements about Foreign Portfolio Investments FPI 1 FPIs are those foreign i...........

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Consider the following statements about Foreign Portfolio Investments (FPI):

1.FPIs are those foreign investors who hold less than 10% of the equity stake in any company.

2.Since FPIs come under the category of hot money, developing countries prefer FDIs more than FPIs.

3.A weakening rupee doesn’t impact future inflows of FPIs.

Which of the statements given above is/are correct?

2 and 3 only

1 only

1 and 2 only

1, 2 and 3

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Explanation:

1 and 2 only

FPIs are those foreign investors who hold less than 10% of the equity stake in any company. (Correct)

Foreign Portfolio Investors (FPIs) are indeed those investors who hold less than 10% of the equity stake in a company.

Since FPIs come under the category of hot money, developing countries prefer FDIs more than FPIs. (Correct)

FPIs are often considered more volatile or "hot money" as compared to Foreign Direct Investments (FDIs). Developing countries may prefer FDIs over FPIs for stability and long-term benefits.

A weakening rupee doesn’t impact future inflows of FPIs. (Incorrect)

A weakening rupee can impact future inflows of FPIs. Exchange rate fluctuations are one of the factors that FPIs consider when making investment decisions in a country.

Therefore, the correct statements are 1 and 2 only.