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:

Pathways

Routes or courses which lead from one place to another, often used metaphorically to describe options or processes to reach a certain goal.

Messages

Units of communication intended to convey information, feelings, or instructions from one entity to another.

Formal Channels

Follow the official chain of command.

Organization's Hierarchy

The arrangement of individuals within an organization according to levels of authority and responsibility.