CFA Practice Question

There are 191 practice questions for this study session.

CFA Practice Question

Which of the following statements is the LEAST ACCURATE with respect to American depositary receipts (ADRs)?

A. Level 1 ADRs may only be traded over the counter.
B. Level 2 ADRs may only be traded on a U.S. exchange or quoted on Nasdaq.
C. Level 3 ADRs may raise capital in the U.S. but only through a private placement.
D. ADRs do not necessarily require the underlying company's approval in order to be traded.
Correct Answer: C

Level 3 ADRs meet all SEC requirements and may therefore raise capital in the U.S. through any of the exchanges.

User Contributed Comments 5

User Comment
taowu What about B?
actiger Quoted on NASDAQ means traded on OTC. B is an correct statement which should not be the answer.
dblueroom Thanks actiger!
CJPerugini Question is asking for LEAST accurate. C is correct.
khalifa92 ADR 1 = OTC
ADR 2&3 = traded on US exchange & NASDAQ
ADR 3 = may raise capital through IPO
Rule 144A (unlisted) = private placements
You need to log in first to add your comment.