CFA Practice Question

There are 191 practice questions for this study session.

CFA Practice Question

American ADRs are shares issued by ______.

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.
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