What is the main difference between Foreign Direct Investment (FDI) and Foreign Portfolio Investment (FPI) ?

CA Foundation · Business Economics · PYQS · September 2024
What is the main difference between Foreign Direct Investment (FDI) and Foreign Portfolio Investment (FPI) ?
(A) A. FDI involves financial assets, while FPI creates physical assets.
(B) B. FDI creates physical assets, while FPI involves only financial assets.
(C) C. Both FDI and FPI create physical assets.
(D) D. Both FDI and FPI involve only financial assets.

Suggested Answer and Working Notes:

Correct Answer: Option (B)

B. FDI creates physical assets, while FPI involves only financial assets.

Topics: Indian Economy

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