Which One of the Following Is NOT an Advantage That

question 68

Multiple Choice

Which one of the following is NOT an advantage that American Depository Receipts (ADRs) have over investing in actual shares of a foreign stock?

• A) ADRs are an effective barrier to foreign currency risk.
• B) Unlike direct foreign stock, ADRs have financial statements presented in a GAAP format.
• C) Dividends are paid in dollars and are easier to collect than actual shares of foreign stock.
• D) ADRs are more liquid and less expensive than buying foreign stock directly.

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Definitions:

Fixed Amounts

Predetermined quantities or sums that do not change over time or in response to varying conditions.

Trade by Bartering

A method of exchanging goods or services directly without using money.

Laissez-Faire

Laissez-faire is an economic philosophy advocating for minimal government intervention in the market, with transactions between private parties being free from tariffs, subsidies, and enforced monopolies.

Government Interference

Actions by the government that affect the market, often with the intention of correcting market failures or achieving a social objective.