Official Answer Key & Detailed Solution
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Correct Answer: Option (D) — 1, 2 and 3 only
Concept & Option Breakdown
Standard Reference VerifiedStatements 1, 2, and 3 are correct: FDI involves lasting management interest and controlling influence, including establishing subsidiaries, holding majority equity (>10% or >50%), or establishing fully financed entities. Statement 4 is incorrect: Portfolio investment involves non-controlling, liquid investments in equity/debt instruments and is categorized separately as Foreign Portfolio Investment (FPI/FII).
FDI and Portfolio Investment are mutually exclusive categories of foreign investment. Eliminating 4 leaves option (d).
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