Foreign Direct Investment - When a company makes a long term investment in a foreign country by either setting up the subsidiary company or working in association over there and getting involved in business process of buying, producing and selling in that foreign country. Examples - Amazon, Walmart, Bajaj Allianz, Citibank, Glaxosmith kline, Ikea, Starbucks. Foreign Institutional Investors - It is an entity or institution which makes investment in a foreign country by getting registered in the stock exchange of foreign market to trade in securities. Examples - Europacific Growth Fund, Abudhabi Investment Authority, Govt. Pension Fund Global. Foreign companies invest in India to take advantage of relatively lower wages, cheaper production, new potential customers, special investment privileges such as tax exemption, interest rate arbitrage, tapping growth potential market. There are benefits associated with host countries inviting foreign investments like employment generation, capita...
Finacial System plays a major role in boosting any economy through generation, regulation and facilitation of fund. Lets learn all about this concept in detail :- Meaning - A financial system involves various components like the financial markets, financial intermediaries, suppliers and borrowers of fund facilitating trade in financial assets regulated by governing bodies. It serves as a network between all financial institutions providing financial services to trade in financial instruments in a way connecting demand with supply. It even serves as a source of capital formation for individual, businesses and government. Financial Market - It is a market for creation and exchange of financial assets involving various participants facilitating price discovery. It may further be divided as Money Market and Capital Market. Money market involves trading in short-term securities like t-bills, commercial papers, certificate of deposits etc. while Capital market involves trading...