- CFA Exams
- CFA Level I Exam
- Topic 5. Equity Investments
- Learning Module 4. Overview of Equity Securities
- Subject 4. Investing in Non-Domestic Equity Securities
CFA Practice Question
Level I ADRs ______
II. can be offered to certain qualified institutional buyers only.
III. are issued by brokers, dealers, or depository banks without the involvement of the issuer.
I. are traded in the over-the-counter (OTC) market.
II. can be offered to certain qualified institutional buyers only.
III. are issued by brokers, dealers, or depository banks without the involvement of the issuer.
Correct Answer: I only
III. Unsponsored ADR are issued by brokers, dealers, or depository banks without the involvement of the issuer.
II. Level I ADRs can be offered to the public. However, if the issuer wants to raise capital in the US, it must be done through a private placement and only certain qualified institutional buyers can participate.
III. Unsponsored ADR are issued by brokers, dealers, or depository banks without the involvement of the issuer.
User Contributed Comments 4
| User | Comment |
|---|---|
| Swetha | Then why isn't Statement no. II correct ?? |
| alki | notice the word only at the end of statement II |
| joywind | ADRs makes the ownership diversified internationally, not the same thing as 'raising capital' which adds more ownership. |
| johntan1979 | III fits the definition of UNsponsored DRs, whereas all ADRs are sponsored. |