ADR

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American depositary receipts are negotiable instruments issued by a U.S. depository bank. They represent shares of stocks in a foreign company. They trade on U.S. markets just like any other stock. They make it easy for US investors to trade foreign stocks since they are traded in US dollars instead of the currency of the country in which the company is registered. They may be marketed as one share of the foreign stock, a part of one share, or multiple shares. Nevertheless, the market price of an ADR closely matches that of the company’s stock on its home country’s exchange.

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