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You live in the U.S. and want to invest in a Japanese company because you believe its stock is uniquely positioned to be unusually profitable over the next 2 years. However, you do not have access to the Japanese financial markets. You could still invest in this stock if the company: a. issues Samurai bonds. b. will agree to a swap. c. issues Eurobonds. d. trades as an ADR. e. issues gilts.

Sagot :

Parrain

Answer: d. trades as an ADR

Explanation:

American Depository Receipts (ADR) allow for Americans to trade on foreign stock as if they were trading in American stocks. It works by a bank buying a lot of shares in the Japanese company for instance.

They will then reissue these stock as ADRs in the American stock exchanges and also value the ADR based on their valuation models to find out the ratio of ADR to share quantity. If the Japanese company is trading as an ADR. you will be able to invest in them from the United States.

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