SIE Exam Question 115: Answer and Explanation

Question: 115

Dollar-denominated negotiable receipts for company stock of a foreign company held in trust in a foreign branch of a U.S. bank are __________________.

• A. IPOs
• B. ADRs
• C. AMTs
• D. ATMs

Correct Answer: B

Explanation:

American depositary receipts (ADRs) are dollar-denominated negotiable receipts for company stock of a foreign company held in trust in a foreign branch of a U.S. bank. An initial public offering (IPO) refers to the event of a company first offering its shares for sale to the public. An alternative minimum tax (AMT) is a backup tax designed to ensure that high earners cannot use tax avoidance strategies to lower their tax liability below a certain level. Automated teller machines (ATMs) are machines that can be used to deposit or withdraw funds from a customer's bank account.