ADRs Cannot Be Exchanged for the Underlying Shares of the Foreign

question 34

True/False

ADRs cannot be exchanged for the underlying shares of the foreign stock, therefore, arbitrage cannot keep the prices in line with the foreign price of the stock.

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Definitions:

Pseudonyms

Fictitious names used by authors, performers, and other public figures to conceal their identity.

Interstate Commerce

Interstate commerce refers to the purchase, sale, or exchange of commodities, transportation of people, money or goods, and navigation of waters between different states.

Expressly Grants

Specifically provides or allocates rights, powers, or privileges in an explicit manner.

Constitution

The fundamental principles and laws of a nation, state, or social group that determine the powers and duties of the government and guarantee certain rights to the people.