What does FDI stock represent?

FDI stock, or foreign direct investment stock, indicates the total value of investment that foreign entities have made in a country at a given point in time. This includes the value of equity, reinvested earnings, and other capital instruments that foreign investors own in domestic firms.

Choosing the second option is correct because the book value effectively reflects the net worth of these foreign-owned firms, emphasizing the investment's recorded worth. This value may change over time due to profits, losses, depreciation, and other factors, but it fundamentally encapsulates the owned assets through FDI.

The other options don't accurately capture the definition of FDI stock. The first choice is too narrow because it solely references local investment, missing the involvement of foreign entities. The third choice addresses revenue instead of the investment value, which is not what FDI stock measures. Lastly, the fourth option focuses on the quantity of investments rather than the overall financial value of these investments, which is central to understanding FDI stock.