Question

Correct the underlined words and rewrite the following sentence:
Depository Receipt traded in USA is called as Global Depository Receipt

Hint:

It's all in the name: {A}merican DRs are for the USA, while {G}lobal DRs are for international markets, often outside the USA.

Answer 1

Step 1: Differentiate between types of Depository Receipts. A Depository Receipt (DR) allows investors to hold shares in foreign companies. Step 2: Define ADR and GDR. American Depository Receipt (ADR) is a DR issued by a U.S. bank representing a specified number of shares in a foreign stock that is traded on a U.S. stock exchange. Global Depository Receipt (GDR) is a similar instrument but is typically traded in Europe or on multiple international exchanges. Step 3: Apply the definition to the question. Since the question specifies the DR is traded in the USA, the correct term is American Depository Receipt.