- 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
American ADRs are shares issued by ______.
B. foreign banks that represent indirect ownership of shares in a foreign company
C. U.S. banks that represent direct ownership of shares in a foreign company
A. U.S. banks that represent indirect ownership of shares in a foreign company
B. foreign banks that represent indirect ownership of shares in a foreign company
C. U.S. banks that represent direct ownership of shares in a foreign company
Correct Answer: A
User Contributed Comments 5
| User | Comment |
|---|---|
| actiger | "indirect" ownership |
| dblueroom | i guess because some cant exercise voting right and full benefit of a share. |
| joywind | the nature of the shares is "held in deposit" so the bank is not the direct owner of those shares. |
| gulfa99 | in other words, us banks act as custodian |
| CFAToad | I believe indirect refers to the depositor, not the bank. It is my understanding that the fund or account is the direct owner, a prerequisite to offer participation in gains and losses. |