Question : GDR stands for:
Option 1: Global Depository Receipts
Option 2: Global Dividend Receipts
Option 3: Government Debt Reserve
Option 4: General Disclosure Requirements
Correct Answer:
Global Depository Receipts
Solution : The correct answer is (a) Global Depository Receipts
GDR stands for Global Depository Receipts. GDRs are financial instruments issued by a depository bank outside the country where the issuing company is located. They represent ownership in shares of foreign companies and are used to facilitate investment in those companies by investors from different countries. GDRs allow foreign companies to raise capital from international markets by issuing their shares in the form of depository receipts. These receipts are then listed and traded on stock exchanges in countries other than the company's home country. GDRs provide investors with an opportunity to invest in foreign companies without having to directly purchase the shares in the company's home market.
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