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:

Fluid-filled Cushion

A protective layer or structure within the body comprised of fluid, providing support or absorbing shock, common in joint and tissue spaces.

Articulating Surface

The surface of a bone that makes contact with another bone, allowing for joint movement.

Synovial Membrane

A specialized connective tissue that lines the inner surface of capsules of synovial joints, secreting synovial fluid for lubrication.

Cruciate Ligament

One of the major ligaments in the knee, crucial for stabilizing the joint, including both the anterior and posterior varieties.