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When interest is compounded the total time period is subdivided into several interest periods for example 1 year 3 months 1 month How does compound interest affect the future value of an investme?
Wiki User
∙ 13y ago
The more often interest is compounded (the shorter the interval), the faster the
total value of the investment grows, and the more it's worth after any given
period of time.
Wiki User
∙ 13y ago
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What is the definition of foreign direct investment?
Foreign indirect investment refers to investments made by individuals, businesses, or institutions in foreign markets through financial intermediaries, rather than directly owning foreign assets. It involves investing in financial instruments or vehicles that provide exposure to foreign assets, such as stocks, bonds, real estate, or other financial instruments, without owning the assets directly. Foreign indirect investment can take various forms, including: Mutual Funds: Investors pool their money in a mutual fund, and professional fund managers invest that money in a diversified portfolio of foreign securities. Exchange-Traded Funds (ETFs): Similar to mutual funds, ETFs are investment funds that are traded on stock exchanges. They offer exposure to foreign markets through a basket of foreign securities. Hedge Funds: Hedge funds may invest in various foreign assets, providing investors with exposure to global markets and strategies that are not easily accessible to individual investors. Global or International Investment Funds: These funds specifically focus on investing in foreign markets across various regions or countries. Managed Accounts: Investors can also have their portfolios managed by professional wealth managers or investment advisors who allocate a portion of the funds to foreign assets. Real Estate Investment Trusts (REITs): Some REITs invest in foreign real estate properties, allowing investors to participate in international real estate markets indirectly. Foreign indirect investment offers several benefits, including diversification across multiple markets and asset classes, access to international opportunities, and professional management by experienced fund managers or advisors. It is particularly useful for investors who may lack the expertise or resources to directly invest in foreign markets or those seeking a more hands-off approach to international investing. However, foreign indirect investment also comes with risks, such as currency fluctuations, political and economic instability in foreign countries, and the performance of the underlying assets in the investment vehicle. As with any investment, it's essential to carefully consider your investment goals, risk tolerance, and the specific characteristics of the investment vehicle before making foreign indirect investments.
