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?

Economics (M.Phil./Ph.D.) 2017 Panjab University Entrance Exam With Answers

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48.

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 that FDI

The answer is: B

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