Multiple Choice
Kayla purchased 500 ADRs in Pearson PLC, a British Company. How will fluctuations in the dollar/pound exchange rate affect the value of her investment?
A) Because the ADRs are denominated in dollars, the exchange rate will have no effect on her investment.
B) Changes in the exchange rate will be directly reflected in both the ADR value and dividends.
C) If the pound weakens against the dollar, the dollar value of her ADRs will increase.
D) If the dollar weakens against the pound, the value of her ADRs will decrease.
Correct Answer:
Verified
Correct Answer:
Verified
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