McqMate
| Q. |
Which type of foreign investment is considered as unsafe? |
| A. | Foreign Direct Investment (FDI) |
| B. | Portfolio Investment |
| C. | NRI deposits |
| D. | External commercial borrowing |
| Answer» B. Portfolio Investment | |
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Explanation: Portfolio Investments are considered unsafe. These are investments in the form of a group (portfolio) of assets, including transactions in equity securities, such as common stock, and debt securities, such asbanknotes, bonds, and debentures. Portfolio investments are passive investments, as they do not entail active management or control of the issuing company. Rather, the purpose of the investment is solely financial gain, in contrast to foreign direct investment (FDI), which allows an investor to exercise a certain degree of managerial control over a company. |
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