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    Question

    Which of the following best describes a Global Depositary Receipt (GDR)?

    A It is a receipt issued by multinational banks on receipt of money Correct Answer Incorrect Answer
    B It is a receipt issued by stock exchange to bank for clearing Correct Answer Incorrect Answer
    C It is a receipt issued by an overseas bank in lieu of shares of a domestic company Correct Answer Incorrect Answer
    D It is a receipt issued by stock exchange on investment by FPI Correct Answer Incorrect Answer
    E It is a receipt issued by IMF to member nations that represent forex reserve currency Correct Answer Incorrect Answer

    Solution

    A Global Depository Receipts (GDR) is a foreign currency denominated instrument in form of a receipt, which is issued by an overseas bank on the back of shares issued by a domestic company. It is listed on the foreign stock exchange and helps foreign individuals to invest in the shares of a company registered in another company.

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