Monday, March 10, 2008

Chapter 4: 4.4

4.4: Why is direct investment considered risky?

Direct investors have either a controlling interest or a large minority interest in a firm. This gives them the greatest potential reward as well as a great deal of risk. Direct foreign investors are usually highly regulated by their host country as the income from the company flows in and out of the country and has a profound impact on their economy.

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