| The disadvantage of FDI are |
| 1. Foreign investments are always risky because the political situation in some countries can change in an instant. |
| 2. From the foreign affiliates point of view, FDI is ill-advised because they lose their national identity. |
| 3. Investing in foreign countries is infinitely more expensive than exporting goods. |
| Which of the disadvantage(s) given above is/are, correct? |
A) Only 1
B) 1 and 2
C) 2 and 3
D) All of these
Correct Answer: D
Solution :
[d] Foreign investments are always risky because the political situation in some countries can change in an instant. The investor could suddenly find his investment in serious jeopardy due to several different reasons. So the risk factor is always extremely high.
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