SIE Exam Practice Question 453
Question: 453
An investor has purchased shares of a foreign company through an ADR. Which of the following is not true?
Correct Answer: A
Explanation:
A: An ADR may represent more than one share of the company's common stock and may be exchanged for the ordinary common shares. The dividend, however, is paid in the foreign currency and is received by the investor in U.S. dollars; as a result, the investor is subject to currency risk.
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