Match List – I with List – II.

List – I	List – II
A. Greenfield Investment	I. Direct investment overseas aimed to sell the output of a firm’s domestic production process
B. Foreign Portfolio Investment	II. Overseas investment to acquire existing facilities
C. Forward Vertical FDI	III. Overseas investment to create new facilities from the ground up
D. Brownfield Investment	IV. Investment in foreign financial instruments such as foreign stock, government bonds, etc.

Choose the correct answer from the options given below:

Correct option is D

The correct answer is (D) A–III, B–IV, C–I, D–II

• Greenfield Investment (A-III): This occurs when a parent company starts a new venture in a foreign country by constructing new operational facilities from the ground up.
• Foreign Portfolio Investment (B-IV): This involves the entry of funds into a country where foreigners deposit money in a country’s bank or make purchases in the country’s stock and bond markets for short-term gain, without direct control over the company.
• Forward Vertical FDI (C-I): This is a type of FDI where an industry abroad provides the same or similar services as the domestic production but focuses on the distribution or sale of the output.
• Brownfield Investment (D-II): This refers to the purchase or lease of existing production facilities to launch a new production activity. It is the opposite of Greenfield investment.

Information Booster:
• FDI provides long-term capital and technology transfer, whereas FPI is often referred to as 'hot money' due to its volatility.
• Backward Vertical FDI involves investing in a foreign facility that provides inputs (raw materials) for a firm's domestic production.
• Greenfield investments are generally preferred by developing nations as they create more jobs than Brownfield acquisitions.
• FPI is more liquid than FDI because investors can sell their shares or bonds relatively quickly on the open market.