Multiple choice

Which of the following is termed as 'Hot money'?

  1. FDI

  2. FII

  3. ADR

  4. GDR
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Hot money refers to Foreign Institutional Investment (FII) - funds that move quickly between markets in search of higher short-term returns. Unlike FDI (Foreign Direct Investment) which is long-term and stable, FII is volatile and can exit rapidly, hence the term 'hot money'.

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