Consider the following:1. Foreign currency convertible bonds2. Foreign institutional investment with certain conditions3. Global depository receipts4. Non-resident external depositsWhich of the above can be included in Foreign Direct Invest- ments?
✓ Correct answer: a) 1, 2 and 3
ExplanationForeign Direct Investment (FDI) refers to an invest- ment made by an entity (typically a company or individual) from one country into a business or asset in another country, with the intent of establishing a lasting interest and exerting a degree of influence over the enterprise’s management and operations.It’s not just about a financial transaction but more about substantial and enduring involvement.Foreign currency convertible bonds (FCCBs) are debt instruments issued by a company in a foreign currency, which can be converted into equity shares at a future date.Because FCCBs can be converted into equity, and thus represent a potential ownership stake so They are considered a component of FDI.Foreign Institutional Investment (FII) are inves-tments made by foreign institutions in the financial markets of another country.In India, if an FII’s investment exceeds 10% of the post-issue paid-up equity capital of a company, it is reclassified as FDGlobal Depository Receipts (GDRs) are financial instruments used by companies to raise capital from international markets.They repr
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