Portfolio investment is defined as:

• A. A strategic partnership with joint ownership.
• B. A non-controlling financial interest in another entity
• C. An exclusive licensing deal.
• D. A majority stake in a local company.

Answer: (B)

The idea behind portfolio investment is having a financial stake in another company without trying to control or influence how it operates. It usually means buying stocks or bonds to earn returns from dividends, interest, or potential price gains, while the investor stays largely hands-off in management. That non-controlling nature is what distinguishes portfolio investments from other forms of investment that involve influence or control.

Why this option fits: it describes a non-controlling financial interest in another entity, which is exactly what portfolio investment is.

Why the other ideas don’t fit: a strategic partnership with joint ownership implies a shared management role or a direct, collaborative venture, which is a direct investment rather than portfolio. An exclusive licensing deal involves rights to use intellectual property rather than ownership of the company’s equity. A majority stake means control over the company, another form of direct investment rather than portfolio investment.