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?
- FII helps bring better management skills and technology, while FDI only brings in capital
- FII helps in increasing capital availability in general, while FDI only targets specific sectors
- FII is considered to be more stable than FDI
- FDI flows only into the secondary market, while FII targets primary market
FDI is an investment that a parent company makes in a foreign country. On the contrary, FII is an investment made by an investor in the markets of a foreign nation.
The correct option is B.