Define each of the following as direct or portfolio foreign investment. a. Nike (a U.S....

Define each of the following as direct or portfolio foreign investment.

     a. Nike (a U.S. company) builds new factories in Cambodia:     (Click to select)   Neither type of investment   Direct investment   Portfolio investment  .

     b. A U.S. hedge fund purchases 30 percent of the shares of a Brazilian paper manufacturer:     (Click to select)   Portfolio investment   Neither type of investment   Direct investment  .

     c. Mercedes-Benz (a German company) builds a manufacturing plant in Alabama:     (Click to select)   Neither type of investment   Direct investment   Portfolio investment  .

     d. Intel (a U.S. company) sets up a new call center in India:     (Click to select)   Portfolio investment   Neither type of investment   Direct investment  .

     e. A British chocolate maker buys a smaller U.S. rival:     (Click to select)   Direct investment   Portfolio investment   Neither type of investment  .

     f. Hilton Hotels (a U.S. company) builds a new resort in Hawaii:     (Click to select)   Portfolio investment   Neither type of investment   Direct investment  .

Solutions

Expert Solution

Nike (a U.S. company) builds new factories in Cambodia: Direct investment - In this case, Nike seeks to expand its business and manufacturing in Cambodia.

A U.S. hedge fund purchases 30 percent of the shares of a Brazilian paper manufacturer: Direct investment. Here the motive of investment is not to expand manufacturing business but to seek a return on the investment,

Mercedes-Benz (a German company) builds a manufacturing plant in Alabama: Neither type of investment - Since the investment is within the same country it is neither the type of investment.

Intel (a U.S. company) sets up a new call center in India: Direct investment. This investment is done to expand the business by setting up a call center in India

A British chocolate maker buys a smaller U.S. rival: Direct investment. Here also the business seeks to expand its operations.

Hilton Hotels (a U.S. company) builds a new resort in Hawaii: Neither type of investment. Since the investment is within the same country it is neither the type of investment.

Rahul Sunny answered 1 year ago

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