MACASADIA, KIER M.

Week 8 Activity
Answer the following questions and submit it to our google class room on the prescribed
due date set on the system. 

1. Which of the following are direct foreign investments?

1. A Chinese company pays $6.49 million for a stake in Hilton.
2. A Russian businessman buys $44 billion on FOREX.
3. An American company buys another American company; stockholders in
the bought-U.S. company sell their shares on FOREX.
4. A Turkish company builds a factory in Ethiopia and manages the factory
as a contractor to the Turkish government.

The following two are foreign direct investments.

a. A Chinese company pays $6.49 million for a stake in the Hilton.

Here we see that a Chinese company pays $6.49 million for a stake in the Hilton,
which is a U.S based multinational company. Here, the Chinese company
acquires $6.49 million worth share in Hilton, so it is a foreign direct investment.

b. A Turkish company builds a factory in Ethiopia and manages the factory as a

contractor to the Turkish government.

Here, the Turkish company builds a factory in Ethiopia and manages the factory
as a contractor to the Turkish government. It is a Turkish green field investment
in Ethiopia. So, it is also a foreign direct investment.

Options (b), and (c) are not Foreign Direct Investment.