If an American-based firm opens and operates a new clothing factory in Honduras, then it is engaging in a. indirect foreign investment. b. foreign portfolio investment. c. foreign financial investment. d. foreign direct investment.

The correct answer is "d. foreign direct investment.".

Explanation: It is engaging in foreign direct investment.

In the business sphere, direct foreign investment is when long-term capital is allocated in another country for the opening and operation of companies in this case of clothing factory with the purpose of becoming international.

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