Which of the following statements shows the difference between foreign direct investment (FDI) and capital market?

FDI allows investors to buy shares of companies, whereas the capital market offers ownership of business.

No worries! We‘ve got your back. Try BYJU‘S free classes today!

FDI allows investors to own asset or ownership of business, whereas the capital market allows one to buy share.

Right on! Give the BNAT exam to get a 100% scholarship for BYJUS courses

FDI avails investment from individuals, whereas the capital market loans from bank.

No worries! We‘ve got your back. Try BYJU‘S free classes today!

FDI allows for domestic investors, whereas the capital market allows for foreign investors only.

No worries! We‘ve got your back. Try BYJU‘S free classes today!

Open in App

Solution

The correct option is B FDI allows investors to own asset or ownership of business, whereas the capital market allows one to buy share.
Investors can invest in a foreign country through two mechanisms—FDI and capital market. Through FDI, money is invested in buying new land, setting up factories, and buying machinery. Through capital market, investors can buy shares of companies.

Suggest Corrections