The figure given below shows the demand curves [D 1 and D 2 ] and the supply curve [S 1 ] of capital.Figure 17.1

-Which of the following is true of American Depository Receipts (ADRs)?

Question

The figure given below shows the demand curves [D 1 and D 2 ] and the supply curve [S 1 ] of capital.Figure 17.1
 
-​Which of the following is true of American Depository Receipts (ADRs)?

Quizplus · Accepted Answer

ADRs are certificates issued by American banks that represent a specific number of shares of a foreign company's stock. Each ADR is typically backed by one or more of the foreign company's local shares. Option B correctly states this fact. Option A is false because ADRs can be sold over the counter. Option C is partially true but incomplete, as it is not restricted to U.S. corporations. Option D is irrelevant, as ADRs are not used for purchasing raw materials. Option E is false, as ADRs are issued by American banks, not the federal government.

The Figure Given Below Shows the Demand Curves [D1 and D2]

The Figure Given Below Shows the Demand Curves [D₁ and D₂]