Products & RisksQuestion 4 of 125
An American Depositary Receipt (ADR) is best described as:
a.A U.S. government-guaranteed foreign bond
b.A negotiable receipt representing ownership of shares in a foreign company, trading in U.S. markets
c.A mutual fund limited to emerging market equities
d.A derivative contract on a foreign currency
Explanation
An ADR is a negotiable certificate issued by a U.S. depositary bank representing a specified number of shares in a foreign corporation, allowing the shares to trade in U.S. dollars on U.S. markets. ADR holders face currency risk and generally lack full voting rights.
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