Which factors increase international portfolio investments into a country? Check all that apply: Expected appreciation of...
Which factors increase international portfolio investments into a country?
Check all that apply:
Expected appreciation of the foreign currency
High potential economic growth
High interest rates
High tax rates on dividends and interest
Homework Answers
Answer: 2nd and 3rd options
Growth: if the country has high potentiality of growth, it attracts foreign investment to come because such investment has immense chance of getting high returns in future.
Interest rate: if it is high, foreign investment should get better returns; therefore, it attracts foreign investments.
Other options are not correct:
1st option: this makes foreign currency stronger than the investing country. Investment in such case can’t give higher exchange value.
4th option: tax rates should not be high but low for attracting foreign investments.
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