Question

    Consider the following statement regarding Foreign Portfolio Investment (FPI):

    1. FPI involves an investor buying foreign financial assets.

    2. It involves an array of financial assets like fixed deposits, stocks, and mutual funds.

    3. All the investments are passively held by the investors.

    Which of the above statement is/are correct?

    A 1 only Correct Answer Incorrect Answer
    B 2 only Correct Answer Incorrect Answer
    C 3 only Correct Answer Incorrect Answer
    D 1, 2 और 3 Correct Answer Incorrect Answer

    Solution

    Foreign Portfolio Investment (FPI) involves an investor buying foreign financial assets. It involves an array of financial assets like fixed deposits, stocks, and mutual funds. All the investments are passively held by the investors. Investors who invest in foreign portfolios are known as Foreign Portfolio Investors. Foreign Portfolios increase the volatility.

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