An American Depositary Receipt represents ownership in the shares of a non-U.S. company and trades in U.S. financial markets. The stock of many non-US companies trade on US stock exchanges through the use of ADRs. ADRs enable U.S. investors to buy shares in foreign companies without undertaking cross-border transactions. ADRs carry prices in US dollars, pay dividends in US dollars, and can be traded like the shares of US-based companies. Each ADR is issued by a U.S. depositary bank and can represent a fraction of a share, a single share, or multiple shares of the foreign stock. An owner of an ADR has the right to obtain the foreign stock it represents, but US investors usually find it more convenient simply to own the ADR. The price of an ADR is often tracks the price of the foreign stock in its home market, adjusted for the ratio of ADRs to foreign company shares. American depository receipt is a negotiable and transferable certificate issued by a U.S. bank representing a specified number of shares in a foreign stock that is traded on a U.S. exchange. ADRs are denominated in U.S. dollars, with the underlying security held by a U.S. financial institution overseas. ADR’s are a good way to invest in a foreign company without leaving the U.S. while dividends and capital gains are in U.S. dollars. ADRs do not eliminate the currency and economic risks but they help reduce administration and duty costs. Dividend payments would be converted to U.S. dollars, the net of conversion expenses and foreign taxes and are in accordance with the deposit agreement. ADRs have been offering companies, investors and traders global investment opportunities since the 1920s. They are listed on the NYSE, AMEX or NASDAQ. International and European DRs are usually traded on the U.S national stock exchange, such as NYSE or the American Stock Exchange.  Global DRs are usually listed on the European stock exchange such as the London Stock Exchange. Both ADRs and GDRs are usually denominated in U.S. dollars, but can also be denominated in Euros. The depository receipt is created when a foreign company desires to list its already publicly traded shares or debt securities on a foreign stock exchange. For the investors, investing internationally means portfolio diversification, higher risk, and higher returns without having to add additional risk when investing internationally. Depository receipts purpose is to increase global trade which can help increase local and foreign markets but also the exchange of information, technology, regulatory procedures as well as market transparency. WORKS CITEDHeakal, R. (n.d.). Investopedia a Forbes Digital Company. Retrieved July 6, 2009, from http://www.investopedia.com/articles/03/091003.asp