Question

Which of the following is/ are treated as artificial currency?

• A. ADR
• B. GDR
• C. Both GDR and ADR
• D. SDR

Answer 1

The Correct Option is D

To determine which of the given options are treated as artificial currency, we need to understand the nature of each item listed:

1. ADR (American Depositary Receipt): ADRs are a way for U.S. investors to own shares of a foreign company without having to deal with foreign exchanges. They are not considered a currency, artificial or otherwise.
2. GDR (Global Depositary Receipt): Similar to ADRs, GDRs allow companies to trade their shares in multiple markets outside their home country. Again, they are related to equity and not currency.
3. SDR (Special Drawing Rights): SDRs are an international type of monetary reserve currency created by the International Monetary Fund (IMF) to complement its member countries' official reserves. They have the characteristics of artificial currency since they are not a currency in themselves but a potential claim on the freely usable currencies of IMF member countries.

Based on the definitions above, the item that is treated as an artificial currency is:

SDR