Q. Consider the following statements:
1.Foreign portfolio investment (FPI) consists of securities and other financial assets held by investors in another country. 
2.FPI allows the investor with direct ownership of a company’s assets.
3.FPI is more liquid than Foreign Direct Investment (FDI).
Which of the statements given above are correct?

[A] 1 and 2 only

[B] 2 and 3 only

[C] 1 and 3 only

[D] 1, 2 and 3

Answer: C
Notes:

Explanation –

Statement 1 and 3 are correct. FPI consists of securities and other financial assets held by investors in another country. FPI is more liquid than FDI.

Statement 2 is incorrect. FPI does not provide the investor with direct ownership of a company’s assets.

Source: The Times of India