Question : Questions : Different Sources of Finance
Statement 1: Global Depository Receipts (GDRs) enable foreign companies to raise funds in their home country's markets.
Statement 2: GDRs are issued by domestic companies in international markets.
Option 1: Statement 1 is true, and statement 2 is false.
Option 2: Statement 1 is false, and statement 2 is true.
Option 3: Both statements 1 and 2 are true.
Option 4: Both statements 1 and 2 are false.
Correct Answer:
Statement 1 is true, and statement 2 is false.
Solution : The correct answer is (a) Statement 1 is true, and statement 2 is false.
Statement 1 is true. Global Depository Receipts (GDRs) are financial instruments that enable foreign companies to raise funds in international markets, including outside their home country. GDRs are denominated in a foreign currency and are traded on international stock exchanges.
Statement 2 is false. GDRs are not issued by domestic companies in international markets. GDRs are typically issued by foreign companies, allowing them to access capital from investors in other countries.
