Gujarat BoardEnglish MediumSTD 11 CommerceEconomicsEconomic Reforms2 Marks
Question
Give a short explanation about Foreign Institutional Investment.
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Answer
Those foreign companies that invest in financial institutions and bond/ stock/share markets of another country are called Foreign Institutional Investors (Fll). Such an investment is also called portfolio investment.
Fils are the big companies such as investment banks, mutual fund houses, etc. who invest considerable amount of money in the Indian markets.
Such companies have to register in India as Foreign Institutional Investors. Then they buy such stocks from the bond/share market of India.
Thus, instead of investing in plant and machinery in another country like India these companies invest in the financial market.
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