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    Question

    A dollar denominated instrument, tradable on stock exchange in Europe or private placement in USA, representing one or more shares of the issuing company is called-

    A American Depository Receipt (ADR) Correct Answer Incorrect Answer
    B Global Depository Receipt (GDR) Correct Answer Incorrect Answer
    C European Depository Receipt (EDR) Correct Answer Incorrect Answer
    D Asian Depository Receipt (ADR) Correct Answer Incorrect Answer
    E Indian Depository Receipt (IDR) Correct Answer Incorrect Answer

    Solution

    A global depository receipt (GDR) is a certificate issued by a depository bank, which purchases shares of foreign companies and deposits it on the account. They are the global equivalent of the original American depository receipts (ADR) on which they are based. GDRs represent ownership of an underlying number of shares of a foreign company and are commonly used to invest in companies from developing or emerging markets by investors in developed markets.

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