Both Foreign Direct Investment FDI and Foreign Institutional Investor FII are related to investment ...........

Economic Affairs Foreign Investment

Both Foreign Direct Investment (FDI) and Foreign Institutional Investor (FII) are related to investment in a country. Which one of the following statements best represents an important difference between the two?

FII helps bring better management skills and technology, while FDI only brings in capital

FII helps in increasing capital availability in general, while FDI only targets specific sectors

FDI flows only into the secondary market, while FII targets primary market

FII is considered to be more stable than FDI

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Explanation:

2nd option is correct i.e. FII helps in increasing capital availability in general, while FDI only targets specific sectors
When any organization in one nation makes an investment in any organization in abroad, it is mostly called as foreign direct investment or FDI. When any organization in abroad make investment in the market related to stock of a nation then this investor is called foreign institutional investor or FII.