Which of the following is an example of foreign portfolio investment?(1 point)
Responses
An investor in the United Kingdom purchases stock issued by a United Kingdom corporation.
An investor in the United Kingdom purchases stock issued by a United Kingdom corporation.
A business owner in the United Kingdom purchases a United States business.
A business owner in the United Kingdom purchases a United States business.
An investor in the United Kingdom purchases stock issued by a United States corporation.
An investor in the United Kingdom purchases stock issued by a United States corporation.
A business owner in the United Kingdom purchases a United Kingdom business.
A business owner in the United Kingdom purchases a United Kingdom business.
The example of foreign portfolio investment from the given options is:
An investor in the United Kingdom purchases stock issued by a United States corporation.
To arrive at this answer, we need to understand what foreign portfolio investment means. Foreign portfolio investment refers to the investment in securities (such as stocks, bonds, or mutual funds) issued by foreign entities. It involves purchasing financial assets in a foreign country, typically in the form of stocks or bonds.
In this case, the investor in the United Kingdom is purchasing stock issued by a United States corporation. Since the investor is buying stocks of a foreign corporation (from the perspective of the investor), it qualifies as foreign portfolio investment.