For a U.S resident,the best way to minimize exchange rate risk when investing in foreign stocks is to __________.

Question

For a U.S resident,the best way to minimize exchange rate risk when investing in foreign stocks is to __________. ​

Quizplus · Accepted Answer

Buying American Depositary Receipts (ADRs) is the best option for a US resident to minimize exchange rate risk when investing in foreign stocks. ADRs are U.S. dollar-denominated certificates issued by U.S. banks that represent ownership in a foreign company's stock. ADRs eliminate the need for currency conversion because they trade on U.S. exchanges and the dividend payments are in U.S. dollars. This helps to reduce the foreign exchange risk that comes with investing in foreign stocks.

For a US Resident,the Best Way to Minimize Exchange Rate Risk When