Both Foreign Direct Investment (FDI) and Foreign Institutional Investor (FII) are related to investment in a country. Which one of the following statements best represents an important difference between the two?
[UPSC Civil Services Exam – 2011 Prelims]
(a) FII helps bring better management skills and technology, while FDI only brings in capital
(b) FII helps in increasing capital availability in general, while FDI only targets specific sectors
(c) FDI flows only into the secondary market, while FII targets primary market.
(d) FII is considered to be more stable than FDI
|When a company situated in one country makes an investment in a company situated abroad, it is known as FDI.
|FII is when foreign companies make investments in the stock market of a country
|Entry and Exit
|Long term capital
|Long/Short term capital
|Funds, resources, technology, strategies, know-how, etc
|Increase in country’s Gross Domestic Product (GDP).
|Increase in the capital of the country.
|No such target, investment flows into the financial market.
|Control over a company