Why is the U.S. investing abroad when the world is investing in the U.S.?

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Expert Solution

United States is investing abroad when the world is investing in United States because the following reasons-

A. United States investors are investing abroad because United States economy is a developed economy and there is a less chances of making very high rate of return so investors are exploring emerging markets.

B. United States investors are also investing abroad because there will always be an advantage of diversification and currency hedging.

C. United States investors are also investing abroad because various economies are highly underpenetrated and in those economies even a slight reform can provide with exceptional rate of return and they are on the brink of of expansion So, United States investors are exploring those opportunities.

D. United States investors are also investing abroad in order to take advantage of the strengthening of United States dollars because when they will be investing in other countries when the dollar will be a strong, they will be getting more of the shares and it will also result into having a hedge against the United States currency fluctuations.

E. United States investors are also investing abroad as foreign direct investors and they will be trying to provide their business with additional market share and additional scope of adding new branches and subsidiary.

jeff jeffy answered 2 years ago

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