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Finance Dictionary and Glossary of Investment Terms
American Depository Receipt - ADR
A stock representing a specified number of shares in a foreign corporation. ADRs are bought and sold in the American markets just like regular stocks. An ADR is issued by a U.S. bank, consisting of a bundle of shares of a foreign corporation that are being held in custody overseas. The foreign entity must provide financial information to the sponsor bank. ADRs do not eliminate the currency and economic risks for the underlying shares in another country. ADRs are listed on either the NYSE, AMEX, or Nasdaq.