Chapter12: Managing Economic Exposure And Translation Exposure
Section: Chapter Questions
Problem 4ST
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Question
![Most American investors who are interested in investing in companies listed on foreign exchanges
do so by purchasing
O Foreign stocks directly from brokers that do business in the country where the company is located.
Cola
O Foreign stocks from brokers in the United States.
O American Depository Receipts (ADRS) or mutual funds that hold international stocks.
O Stocks directly from the foreign company.
O None of these.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F42c3698c-85d9-43be-95ca-0f7274595807%2F2c66ae2d-8e70-4cde-9c07-44b4a641eb9a%2Ftzw5d67_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Most American investors who are interested in investing in companies listed on foreign exchanges
do so by purchasing
O Foreign stocks directly from brokers that do business in the country where the company is located.
Cola
O Foreign stocks from brokers in the United States.
O American Depository Receipts (ADRS) or mutual funds that hold international stocks.
O Stocks directly from the foreign company.
O None of these.
Expert Solution
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Step 1
American Depository Receipts:
- It is a certificate representing the shares of foreign stock issued by the U.S. bank. Such certificates are traded on American stock exchanges.
Mutual Funds:
- It is an investment vehicle consisting of a stock portfolio, bonds, or other securities. Mutual funds provide access to diversification and a well-managed portfolio for investors.
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