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    Question

    Identiy the correct

    statements:
    A FDI are permanent in nature Correct Answer Incorrect Answer
    B FII can be sold anytime Correct Answer Incorrect Answer
    C FDI is hot money Correct Answer Incorrect Answer
    D Both a and b Correct Answer Incorrect Answer
    E Both b and c Correct Answer Incorrect Answer

    Solution

    FDI is long-term investment. It acquires huge stake in a company. Sometimes they acquire controlling stake through joint venture or total acquisition. They bring capital, expertise, technology, better management practices etc. FII is very short term in nature and can be withdrawn anytime. Thus it is called HOT money. They invest only get more dividend and have no part in management of company.

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