FOREIGN INVESTMENT

1. DEFINE FI

• foreign capital inflows following a sale of domestic assets or borrowing from overseas residents.

1. Types of FI

• list the 3

1. direct 

2. portfolio

3. reserve assets

1. Types of FI- Direct

• define

• qualities

• when overseas resident invests 10%+ in domestic business

• allows them to have say in business descisions 

• more long term

1. Types of FI- portfolio

• overseas residents invests in less than 10% ownership

• no descision power

• short term due to volitile markets and constant changes

1. Types of FI- reserve assets

2. define

• an investment taken by RBA using reserve assets

1. Why does AUS rely on FI?

• Aus has small population and does not have enough savings relative to pop

• we rely on FI to fund capital infrasturuee and projects

• helps Savings investment gap