Question : ADR stands for:
Option 1: American Dividend Receipts
Option 2: Asian Depository Receipts
Option 3: American Depository Receipts
Option 4: Automatic Dividend Reinvestment
Correct Answer: American Depository Receipts
Solution : The correct answer is (c) American Depository Receipts
ADR stands for American Depository Receipts. ADRs are financial instruments that represent shares of non-U.S. companies that are traded on U.S. stock exchanges. They are designed to facilitate the trading and investment of foreign companies' shares in the United States. ADRs are issued by a U.S. depository bank, which holds the actual shares of the foreign company on behalf of the ADR holders. Each ADR represents a specific number of shares in the foreign company. ADRs are denominated in U.S. dollars and trade on U.S. stock exchanges just like regular stocks, making it easier for U.S. investors to buy and sell shares of foreign companies without directly accessing foreign exchanges.
