American Depository Receipts (ADRs)are ________.
A) certificates that represent shares of stock in American companies
B) dollar deposits made by foreign firms conducting business in the U.S.
C) certificates that trade in the U.S. and represent shares of stock in a non-U.S. company
D) currency deposits made in the U.S. by firms based in other countries

Question

Quizplus · Accepted Answer

ADRs are certificates that represent shares of stock in a non-U.S. company and trade in the U.S. financial markets. This allows U.S. investors to invest in foreign companies without having to purchase the actual foreign shares, and it also allows the foreign companies to raise capital in the U.S. markets. A and B are incorrect as they do not accurately describe what ADRs are. D is also incorrect as it does not relate to ADRs.