The correct answer is D. Transfer of many types of assets.
Foreign direct investment (FDI) is an investment made by a company or individual in one country into business interests located in another country. The main difference between FDI and other types of investment, such as portfolio investment, is that FDI involves a lasting interest in and control over the enterprise.
There are three main forms of FDI:
- Greenfield investment: This is when a company establishes a new business in a foreign country.
- Mergers and acquisitions: This is when a company acquires an existing business in a foreign country.
- Portfolio investment: This is when a company buys shares in a foreign company.
Option A, purchases of existing assets in foreign currency, is a form of FDI. Option B, new investment in property, plant, and equipment, is a form of FDI. Option C, making investment in the mutual funds, is not a form of FDI. Mutual funds are a type of investment fund that pools money from many investors and invests it in a variety of assets, such as stocks, bonds, and other securities. Mutual funds are not considered FDI because they do not involve a lasting interest in and control over the enterprise.
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