Discussion
Foreign equity includes ........
Answer: A
Foreign equity includes ADR's (American Depository Receipts).
An American Depository Receipt is a negotiable certificate issued by a US depository bank and traded in the United States, representing a specified number of shares of a non-US company held by a custodian in the home country. An Indian company issuing ADRs is therefore raising equity capital from foreign investors, and ADRs, like Global Depository Receipts, are classed as foreign equity.
Bonds and commercial papers are debt instruments: the issuer borrows and must repay, so they create no ownership. Gold bonds are government debt securities linked to the price of gold. None of them is equity.
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