Which of the following is an example of direct foreign investment?
a. exporting to a country.
b. establishing licensing arrangements in a country.
c. purchasing existing companies in a country.
d. investing directly (without brokers) in foreign stocks.

Respuesta :

Answer:

It is purchasing existing companies in a country( C)

Explanation:

Exporting to a country : this involved bringing in goods that have already been produced in the home country to another country to sell through distributors or foreign middle-men. This doesn't required direct capital investment rather it is just expanding the market reach.

Establishing licencing arrangements in a country :Here, licence is given to a foreign-based investor to operate using the company name .This is allowed after an agreed sum has been paid and necessary conditions have been fulfilled.

Purchasing existing companies in a country : This required direct investment of equity capital in a foreign based-company and the risk here is higher than other methods of foreign expansion.

Investing directly (without brokers) in foreign market : this is a type of foreign indirect investment in company's financial instruments.

The direct foreign investment has been made by purchasing the foreign stocks directly. Thus, option D is correct.

Direct foreign investment can be described as the investment that has been made by the one company into the shares of the other company that has been settled in another nation.

The direct foreign investments have been made with the  purchase of the foreign stocks that has been made the ownership of the small portion of the foreign country. Thus, option D is correct.

For more information about the direct foreign investments, refer to the link:

https://brainly.com/question/878898

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