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Questions and Answers
Which of the following best describes depositary receipts (DRs)?
Which of the following best describes depositary receipts (DRs)?
- Financial instruments that represent shares of a local company
- Financial instruments that represent shares of a government-owned company
- Financial instruments that represent shares of a foreign company (correct)
- Financial instruments that represent shares of a multinational company
What is the process of issuing a depositary receipt?
What is the process of issuing a depositary receipt?
- A company delivers equity shares to an investor
- A bank delivers equity shares to an investor
- A company delivers equity shares to a bank (correct)
- A bank issues a certificate to a company
What is the difference between sponsored depositary receipts and non-sponsored depositary receipts?
What is the difference between sponsored depositary receipts and non-sponsored depositary receipts?
- Sponsored DRs are traded in the local market, while non-sponsored DRs are traded in the overseas market
- Sponsored DRs are listed on exchanges, while non-sponsored DRs are not (correct)
- Sponsored DRs are issued by companies, while non-sponsored DRs are issued by investors
- Sponsored DRs are denominated in local currency, while non-sponsored DRs are denominated in foreign currency
What is the role of a bank in the process of issuing depositary receipts?
What is the role of a bank in the process of issuing depositary receipts?
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What should companies do if they want their depositary receipts to be listed on exchanges?
What should companies do if they want their depositary receipts to be listed on exchanges?
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