Explain the diversify investor's portfolio internationally, Financial Management

Why might it be very simple for an investor desiring to diversify his portfolio internationally to buy depository receipts as compared to the actual shares of the company?

Answer:  A depository receipt can be obtained on the investor's domestic exchange.  It denotes a package of the underlying foreign security which is priced in the investor's local currency and in a trading range that is common for the investor's marketplace. The investor can purchase a depository receipt in a straight line from his domestic broker, rather than having to deal along with an overseas broker and the requirement of obtaining foreign funds to make the foreign stock purchase. In addition, dividends are received in the local currency rather than in foreign funds which would need to be converted into the local currency.

Posted Date: 5/9/2013 4:07:50 AM | Location : United States







Related Discussions:- Explain the diversify investor's portfolio internationally, Assignment Help, Ask Question on Explain the diversify investor's portfolio internationally, Get Answer, Expert's Help, Explain the diversify investor's portfolio internationally Discussions

Write discussion on Explain the diversify investor's portfolio internationally
Your posts are moderated
Related Questions

CONCEPTS OF WORKING CAPITAL There are two concepts of Working Capital - Net working capital and Gross Working capital. 1. Gross Working Capital Gross Working capital re

QUESTION 1 (a) What are the differences between futures and forwards? (b) Clearly explain the following position on options i) Going long on a call option ii) Going lo

Explain Speculator - Market Participants A speculator attempts to profit from a modification in the futures price. For doing this, the speculator will take a long or short posi

Financial accounting: Financial accounting attempts to establish the value of a particular organisation at a specific point in time, and its earnings over a specified period of

which type of financing is appropriate to each firm

What is the investment opportunity schedule (IOS)?  How does it help financial managers make business decisions? The investment opportunity schedule illustrates graphically pro

what is the value of beta for this fund ? If the benchmark index for this mutual fund increased by 11.00% during the period covered by beta measure, what was the rate of return for

Question #1: Review the Anthony’s Orchard case study in the unit resources. Consider the following assumptions: • The company, according to Anthony’s Orchard Strategic Plan, is h

Q. What do you signify by Cost of Capital? What do you signify by 'Cost of Capital'? What is its meaning and what are the problems in determination of cost of capital? Ans.