ADRs Are a Popular Investment Tool for Many U

question 29

Essay

ADRs are a popular investment tool for many U.S. investors. In recent years several alternatives for investing in foreign equity securities have become available for U.S. investors, yet ADRs remain popular. Define what an ADR is and provide at least three examples of the advantages they may hold over alternative foreign investment vehicles for U.S. investors.

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Definitions:

Classical Conditioning

A fundamental learning technique that involves associations between an environmental stimulus and a naturally occurring stimulus.

Unconditioned Response

A natural, unlearned reaction to an unconditioned stimulus.

Conditioned Stimulus

A formerly neutral stimulus that, after association with an unconditioned stimulus, comes to produce a conditioned response.

Conditioning Procedure

A process in behavioral psychology used to establish a new response to a stimulus by association with a secondary stimulus.